TheCable

One of the crucial innovations in the contributory pension scheme (CPS) in Nigeria was the introduction of the retirement savings account (RSA) transfer, which allows RSA holders to transfer their RSAs from one pension fund administrator (PFA) to another through the retirement savings account transfer system (RTS) deployed by the National Pension Commission (PenCom).

Section 13 of the Pension Reform Act, 2014, enables a holder of an RSA to, not more than once a year, transfer his RSA. The commencement of the RSA transfer process has been a significant milestone attained by PenCom in implementing the CPS, considering that it has been on the drawing board since the advent of the pension reform.

The commission undertook the in-house development and consequent deployment of the Enhanced Contributor Registration System (ECRS) in June 2019, which made it possible to commence RSA transfer. The ECRS enabled the unique identification of contributors registered on the commission’s database, a critical requirement for smooth RSA transfers.

The development of the RSA transfer system (RTS) followed the ECRS. As the application is tagged, the RTS is a unique and robust electronic platform that enables seamless RSA transfers. The application is used for submitting, processing, and monitoring RSA transfer requests.

Meanwhile, to facilitate RSA holders’ ability to make informed choices on service delivery, the commission has expanded its minimum disclosure requirements by providing more statistics on pension industry performance. A special section on the commission’s website has been created, containing relevant information on the RSA transfer for the guidance of RSA holders.

In addition, the commission has also developed the minimum information disclosure requirements to be adopted by all PFAs to enhance the high level of transparency required for the effective operation of the RSA transfer system.

PROCESS OF RSA TRANSFER

To initiate an RSA transfer, the RSA holder is not required to go to their current PFA (transferring PFA). Instead, the RSA holder should approach the PFA they intend to transfer to (receiving PFA) and provide their RSA PIN, surname, current telephone number, and email address. The receiving PFA will validate the biodata of the RSA holder requesting a transfer. After that, the RSA holder’s fingerprint will be captured to authenticate their identity as the final step to conclude the transfer request. The receiving PFA prints two copies of a confirmation slip, which the RSA holder should sign as proof that they initiated the transfer; finally, the PFA retains a copy of the confirmation slip while a copy is given to the RSA holder.

RSA transfer requests received through the RTS are batched and processed at the end of every quarter, four times a year (March, June, September, and December). However, only requests received latest by the end of the second month of a transfer quarter (February, May, August, and November) are treated within the quarter. All transfer requests received within the third month of a quarter are processed in the next quarter.

After a successful RSA transfer, the RSA holder should advise their employer of the new PFA for subsequent remittance of their monthly pension contributions. The RSA holder should also contact their new PFA to ensure that the RSA balance transferred is accurate.

OUTLOOK OF THE RSA TRANSFER

Activating the RSA transfer is expected to result in improved service delivery across the pension industry as PFAs engage in healthy competition by providing enhanced service offerings to benefit RSA holders.

The RSA transfer process has inbuilt controls that ensure only a legitimate RSA holder can initiate and transfer their RSA. One of the ways the controls are achieved is by verifying the RSA holder’s live fingerprint on the National Identity Management Commission (NIMC) database. Furthermore, there are strict administrative sanctions for infractions committed by PFAs, while PenCom monitors the entire process to ensure compliance.

Meanwhile, a total of 34,283 RSAs were transferred in the first week of January 2023. The transfers were in respect of requests submitted by PFAs between 1 September 2022, and 30 November 2022. The total value of the pension assets in respect of the 34,283 RSAs transferred was N 131.79 billion.

Furthermore, from 1 January to 31 March 2023, a total of 28,112 RSA transfer requests were submitted by PFAs on behalf of RSA holders, out of which 24,985 requests were concluded in the first week of April 2023.

In conclusion, the commission urges all RSA holders to continue supporting the pension industry in maintaining ethical standards by basing their decision to transfer their RSA solely on objective considerations as the commission and PFAs continue to provide better solutions to enhance service delivery in the Nigerian pension industry.