A whopping 25,645 Retirement Savings Account(RSA) holders have switched their previous Pension Fund Administrators (PFAs) transferring no less than N102.5 billion pension savings to new managers, LEADERSHIP has learnt.
This movement which took place within a period of nine months, Accor to LEADERSHIP findings, was triggered by the pension contributors’ dissatisfaction over poor service delivery and nasty experiences with their previous administrators as well as their appetite for improved investment returns. However, a pocket of pension contributors switched PFAs for no specific reason as they just followed the bandwagon effect.
The pension transfer window, known as, the Retirement Savings Account (RSA) Transfer System (RTS), was officially launched in November 2020, by the National Pension Commission(PenCom) apparently to improve customer service delivery among PFAs following incessant complaints of poor services by some RSA holders.
Section 13 of the Pension Reform Act (PRA) 2014 empowers an RSA holder to transfer his retirement savings account (RSA) to any PFA of his choice, not more than once a year. However, the transfer is done in four quarters in a year.
A data sourced from PenCom by LEADERSHIP, revealed that, in the last quarter of 2020, 2,799 RSA holders moved N18.8 billion from their previous PFAs to current ones, while the numbers jumped by over 500 per cent in the first quarter of the current year as 12,681 pension contributors moved N47.7 billion contributions to their current pension administrators from the previous ones.
However, in the second quarters of the current year, precisely, between April and June, 10,165 RSA holders switched PFAs, transferring N35.9 billion in the process.
This brought the cumulative number of RSA holders who switched PFAs to 25,645, moving a sum of N102.5billion in the process.
Efforts by LEADERSHIP to speak with some of the concerned contributors failed as both PenCom and the PFAs kept this information confidential, hence, making it difficult to speak with those affected directly.
However, speaking in an exclusive interview with LEADERSHIP yesterday, a pension consultant, Mr. Peter Tai Adediji said, the switch was an anticipated movement, stating that, a lot of contributors have been anxious to move long before now due to majorly poor customer services from the previous PFAs. He is also expecting to see further movement in the current quarter as more awareness on how on to switch PFAs during the transfer window intensifies.
Although he said bandwagon effect played a role in the movement, nonetheless, majority of those who switched PFAs were dissatisfied customers looking for could get better services.
Adediji, who is the group managing director/CEO, Peninscope Professional Warranty Limited, said: “before now, some PFAs don’t pay special attention to their service delivery because there was no competition. They do whatever they like and get away with it. The concerned RSA holders were aggrieved but they had no alternative. ”
The director general of PenCom, Mrs. Aisha Dahir-Umar had said, the RSA Transfer System, launched in November 2020, was another notable technological innovation by the commission.
Indeed, the activation of the RSA transfer provision, which deepens individual choices, is a major milestone in the implementation of the CPS, she pointed out.
Confirming this development at a seminar in Lagos recently, assistant general manager, National Databank Management Department, PenCom, Hajiya Maryam Bello, said, RSA holders planning to initiate RSA transfer requests with their new PFAs (Receiving PFAs), will need to provide; “Surname, PIN, Current Telephone Number, Current Email (Not mandatory but highly desirable), Single Fingerprint Image (Live capture), Photo (Live capture), RSA Holder attestation and Signature and Manual Approval for Fingerprint Impaired.”
On eligibility for transfer, she stressed that, only recaptured RSA holders and those who registered after June 2019 can transfer their RSAs, while active contributors and retirees on Programmed Withdrawal are eligible to transfer their RSAs, even as retirees on Annuity who are making voluntary contributions can equally transfer their RSAs.
RSA holders can only make subsequent RSA transfers after 365 days from the effective date of the last transfer of their RSAs, she added.
Stating that the transfer allows RSA holders to seek more efficient customer service from PFAs as well as seek better returns on investments of their pension contributions, she added that, “PenCom monitors various aspects of PFAs operations after each transfer quarter, to ensure that information provided by them for previous Transfer Quarters are accurate.”