The National Pensions Commission (PenCom) has finalised plans to commence the implementation of the Retirement Savings Account (RSA) transfer window under the Contributory Pension Scheme (CPS).
The transfer process, which is scheduled to commence from November 16, will allow RSA holders to transfer their accounts from one Pension Fund Administrator (PFA) to another within a year, in line with Section 13 of the Pension Reform Act of 2014.
The commission in a statement yesterday said the launch would signify the official opening of RSA Transfer Window.
Prior to the launch, PenCom had successfully developed the RSA application, which is an electronic platform to enable seamless account transfer.
The transfer window option means that retirement account holders can port from one PFA to the other even if he or she does not give any reason for the action.
Experts believed the development will translate into increased competition in the PFA space as account holders will move to operators that give them the best returns on investment.
The commission, however, said it has also conducted extensive workshops for licensed pension operators and state pension bureaus in readiness for the epoch-making event.
“The activation of the RSA transfer process will engender competition and improve service delivery in the pension industry while asserting the right of RSA holders to determine which PFA manages their pension contributions and retirement benefits,” PenCom said.
It had initially projected June 2020 as the commencement date for the RSA transfer window, but had failed to launch the process owing to issues bordering on registration and biometrics.
The commission said it needed to resolve concerns over double registrations by some contributors and improper identification, which may lead to wrongful transfers among account holders.
But for the initial delay, the transfer window was designed to come into force together with the Pension Reform Act 2014, which gave birth to the CPS.
Stakeholders also believed that providing contributors with a transfer option will boost their confidence in the scheme.
According to Section 11(2) of the Pension Reform Act 2004, an employee reserves the right to migrate from one PFA to another without adducing reasons, but may not do this more than once in a year.
The development will put some of the leading PFAs, including ARM Pensions, Stanbic IBTC pensions, Premium Pension Limited and Sigma Pensions Limited under pressure to make adjustments or lose their clients to competition.
Records show the PFAs currently hold about half of the N11 trillion RSA assets.
Among the 21 licensed operators, the top 10 PFAs managed about 88.20 per cent of the total RSA assets. – Thisday.
