PenCom Emphasizes Performance-Based Criteria for PFA Changes

The National Pension Commission (PenCom) is urging Retirement Savings Account (RSA) holders considering switching Pension Fund Administrators (PFAs) to assess performance as a key factor. Mrs. Aisha Dahir-Umar, the Director-General of PenCom, emphasized this stance, highlighting the importance of informed decision-making.

To facilitate this process, PenCom has established a dedicated section on its website where RSA holders can access relevant information. Additionally, the Commission has enhanced its minimum disclosure requirements to provide more comprehensive statistics on pension industry performance.

Dahir-Umar noted that PenCom’s website offers ample information on the performance records of PFAs. Moreover, the Commission has developed minimum information disclosure requirements for PFAs to ensure transparency in the RSA Transfer System’s operation.

The introduction of the RSA Transfer represents a significant advancement in the Contributory Pension Scheme (CPS). This innovation allows RSA holders to transfer their accounts from one PFA to another using the Retirement Savings Account Transfer System (RTS), as stipulated in Section 13 of the Pension Reform Act 2014 (PRA 2024).

PenCom developed the Enhanced Contributor Registration System (ECRS) in June 2019, which paved the way for RSA transfers by enabling unique identification of contributors. Subsequently, the RSA Transfer System (RTS) was deployed as a robust electronic platform for seamless RSA transfers.

The RSA transfer process involves RSA holders initiating the transfer with the receiving PFA, providing necessary information, and validating their identity through fingerprint authentication. Transfer requests are processed quarterly, with batch processing occurring at the end of each quarter.

The activation of RSA transfers is expected to drive improved service delivery across the industry through healthy competition among PFAs. The process incorporates controls to ensure legitimacy, including verification of RSA holders’ fingerprints with the National Identity Management Commission (NIMC) database.

Since the inception of RSA transfers, a significant number of RSA holders have availed themselves of this opportunity. For example, in the last quarter of the previous year, a total of 21,498 RSA transfer requests were submitted to PenCom by PFAs, indicating a growing interest in the process.