Base PFA change on performance metrics, says DG PenCom
The National Pension Commission (PenCom) has issued a clarion call to Retirement Savings Account (RSA) holders considering a switch in Pension Fund Administrators (PFAs), urging them to make decisions based on performance metrics rather than impulse. This call to action comes as PenCom intensifies efforts to enhance transparency and accountability within the pension industry.
Speaking on behalf of the Commission, Director-General Mrs. Aisha Dahir-Umar emphasized the importance of informed decision-making in the RSA Transfer System. To facilitate this, PenCom has revamped its website to include a dedicated section providing comprehensive information on PFA performance records. Additionally, the Commission has expanded its minimum disclosure requirements, offering RSA holders greater insight into industry performance.
Mrs. Dahir-Umar underscored the significance of the RSA Transfer System in advancing the Contributory Pension Scheme (CPS), describing it as a pivotal development that empowers RSA holders to migrate between PFAs. This system, as outlined in Section 13 of the Pension Reform Act 2014 (PRA 2024), enables RSA holders to transfer their accounts once a year, fostering healthy competition among PFAs and driving improved service delivery.
The RSA Transfer Process, elucidated by the Director-General, involves a streamlined approach aimed at simplifying the transition for RSA holders. Instead of visiting their current PFA, individuals seeking to transfer should approach the prospective PFA (Receiving PFA) with essential details. The Receiving PFA then validates the RSA holder’s information before capturing their fingerprint for authentication. Upon completion, the RSA holder receives a confirmation slip, signaling the initiation of the transfer process.
Highlighting the operational dynamics, Mrs. Dahir-Umar outlined that RSA transfer requests are processed quarterly, with batches submitted by PFAs in March, June, September, and December. Requests received by the second month of a transfer quarter are processed within that quarter, while those received later are deferred to the subsequent quarter. Following a successful transfer, RSA holders are advised to inform their employers of the new PFA for seamless remittance of pension contributions.
The Director-General reiterated the anticipated benefits of the RSA Transfer, foreseeing improved service delivery as PFAs vie for RSA holders’ patronage. Emphasizing the system’s integrity, she assured that stringent controls are in place to safeguard against fraudulent activities. Verification of RSA holders’ fingerprints through the National Identity Management Commission (NIMC) database and administrative sanctions for infractions are among the measures instituted to uphold compliance and accountability.
Since the inception of the RSA Transfer System, a substantial number of RSA holders have availed themselves of the opportunity to switch PFAs. Mrs. Dahir-Umar revealed that in the last quarter of the previous year alone, over 21,000 RSA requests were processed by PenCom, underscoring the system’s efficacy in facilitating seamless transfers of pension assets.
As RSA holders navigate their options within the pension landscape, PenCom remains steadfast in its commitment to promoting transparency, accountability, and consumer empowerment. The call to base PFA changes on performance metrics echoes the Commission’s broader mission to ensure the integrity and sustainability of Nigeria’s pension industry.
