Pension Transfer Window Will Promote Competition Among Operators—PenCom

The National Pension Commission has announced that the activation of the Retirement Savings Account transfer system is expected to result in improved service delivery across the pension industry.

The move, according to the commission would also promote healthy competition among Pension Fund Administrators by providing improved service offerings for the benefit of RSA holders.

Speaking at the Virtual launch of the RSA, the Director-General, PenCom, Aisha Dahir-Umar , noted that the Commission which was unable to embark on the full implementation of the RSA transfer policy due to challenges experienced in its contributor registration system has renewed its commitment towards taking the pension industry to greater heights.

This, according to her would be achieved by undertaking the in-house development of some computer applications that are required to enable the opening of the RSA transfer window.

According to her, the development of the RSA Transfer Application would enable the initiation of an RSA transfer request by an account holder in simple steps, while having the capability to conduct other processes in a timely and efficient manner.

She said, “While the transfer of Retirement Savings Accounts from one Pension Fund Administrator to another by RSA holders is all about enhancing individual choices, it should be emphasized that some due diligence is required.

“The Commission had developed and deployed the Enhanced Contributor Registration System in June 2019 to enable the unique identification of contributors registered on the Commission’s database, which is a critical requirement for smooth RSA transfers and address the challenges which were hinged on technology, given that in the early days of the pension reform, contributor registration did not include a biometrics component.”

Speaking further, the DG explained that due to the envisaged competitive activities, the Commission has strengthened the code of ethics and business practices for licensed Pension Operators, to ensure the sustenance of the high ethical standards of the pension industry.

The Secretary to the Government of the Federation, Boss Mustapha in his remarks said that the launch of the RSA Transfer window is a laudable initiative expected to improve service delivery across the pension industry.

He added that the transfer of Retirement Savings Accounts is in line with the provision of Section 13 of the Pension Reform Act 2014, which allows a pension contributor or retiree to move his or her RSA from one Pension Fund Administrator to another, provided that it is not more than once in a year.

According to him, the implementation of the provision, will further deepen the choices given to pension contributors and retirees over the management of their pension funds.

He explained that this is a clear advantage of the Contributory Pension Scheme over the Defined Benefit Scheme.

The SGF said, “We are pleased to be associated with this momentous milestone in the implementation of the Contributory Pension Scheme. It is gratifying that my Office has been providing the necessary support to strengthen the National Pension Commission’s regulatory activities.

“Having reviewed and approved the Regulation on the Transfer of Retirement Savings Accounts, which would guide the process, we are confident that the RSA Transfer System will operate efficiently.

“It is indeed a great honour for me to officially launch the Retirement Savings Account Transfer System. It is our hope that RSA holders will utilize this opportunity to make informed choices for their ultimate wellbeing during retirement.”

He said the Retirement Savings Account transfer provision, though embedded in the Pension Reform Act at the advent of the Pension Reform in 2004, was not implemented earlier, due to challenges experienced in the pension industry.

However, he said the renewed commitment of the Management of the National Pension Commission has resulted in the in-house development of the required ICT Application for the RSA Transfer System.