Dionne Rose, Business Reporter

Emil George, new chairman of the Financial Services Commission. - File

Financial Services Commission, regulator of the private pensions sector, has more than 500 licensing applications before it, but has only signed off on four, said new FSC chairman Emil George.

Essentially, the FSC has registered less than one per cent of the 520 applications placed before it a year and a half ago.

"I am trying to see how the pensions committee can come up with a method of increasing the number of pensions to be certified," the chairman said Tuesday.

"There are 520 applications for pensions to be certified and only four have received certificates."

All pension funds require licensing under regulations passed in March 2006.

From the number of applications at deadline September 2006, policymakers pronounced that private pensions was a $132 billion sector - suggesting that the sector had been grossly undervalued to that point.

$100 million estimate

Prior to 2007, the estimate bandied about was $100 million.

Last year, the FSC had hoped to finalise registration of at least 50 per cent of pension fund applications - having missed a target of 20 per cent the year before - and 60 per cent of the fit and proper reviews of trustees.

Now the regulator says it hopes to complete the trustee applications in this fiscal year, but has repeated its 50 per cent registration target for pension plans, according to the finance ministry's latest Public Sector Bodies report put out in March.

George, who was addressing the Life of Jamaica (LOJ) High Flyers luncheon in Kingston Tuesday, suggested that the regulator's slow pace extended beyond pensions.

LOJ dominates the private pension funds industry with more than $40 billion under management, followed by NCB Capital Markets, which assumed responsibility for the portfolio under a restructuring of the National Commercial Bank group operations.

The FSC also regulates the insurance and securities sectors.

Well in hand

"There have been delays regarding the certification of insurance companies but I understand that these are well in hand for dispatch," said George.

"The truth is that what I am trying to achieve is quicker dealings with applications."

George also suggested that to fast track the process there might have to be amendments to existing legislation.

But when asked by the Financial Gleaner to elaborate, the FSC chairman said for now it was only a matter that might have to be considered.

Whatever measures he takes, however, industry players say their main concern is that he and the FSC technocrats act fast.

"Most members would have expected that most schemes would have been registered by now," said. Alan Lewis, president of the Pension Fund Association of Jamaica.

"But we do understand that the FSC has had its own internal challenges."

The regulatory agency is without a chief executive, following the departure of former executive director Brian Wynter last December. Deputy director George Roper is acting.

New body

A new board and chairman were also recently appointed following transitions under the change of political administration.

"I am sure you would have realised that they would not be able to approve any schemes or funds until the board was in place because the board, under the act gives final approval of the registration of schemes," said Lewis.

But staff to carry its functions has long been a constraint on the FSC.

A special recruitment plan was bandied in 2006 for the registration/licensing project.

But again last year, the regulator said its responsibility for pensions was still proving to be a challenge on its regulatory functions and resources.

Rezworth Burchenson, managing director of Prime Asset Management Limited, said the situation was as frustrating for pension fund managers as their clients, especially for trustees.

"Sometimes it is challenging to convince a member that it is out of our hands, and sometimes members would like to think that the hold-up is because of the administrator or investment manager," said Burchenson.

Prime Asset, he said, has five funds before the FSC for certification, with values ranging from $20 million to $10 billion, and representing some 2,000 members.

dionne.rose@gleanerjm.com