The National Pension Commission (PenCom) has reported a significant surge in Retirement Savings Account (RSA) holder transfers between Pension Fund Administrators (PFAs). According to the commission’s November report, a total of 245,625 RSA holders have changed their PFAs from 2020 to 2023.
In 2023 alone, 101,820 RSA holders transferred from one PFA to another, marking a 10.2% increase compared to the 92,413 transfers recorded in 2022. This figure represents the highest recorded transfers in the sector within this timeframe.
The report also highlighted that RSA holders moved a total of N462 billion in 2023, indicating a 28% increase compared to the N361.5 billion transferred in the previous year.
The ability for RSA holders to transfer their accounts from one PFA to another is in accordance with Section 13 of the Pension Reform Act (PRA) 2014. This provision aims to provide flexibility for account holders to choose PFAs that align with their preferences and service satisfaction.
The RSA Transfer System (RTS), an electronic platform designed by PenCom, facilitates the coordination of all processes related to RSA transfers. The system ensures efficient initiation, processing, and monitoring of RSA transfers, with real-time determination of the global net transfer positions (GNTPs) for all affected PFAs.
The recapitalization of PFAs, increased from N1 billion to N5 billion, has played a role in encouraging mergers and acquisitions in the industry. This dynamic landscape has provided RSA holders with a diverse range of options, contributing to the observed increase in transfers.
This trend underscores the importance of competition and service quality in the pension industry, as RSA holders actively exercise their right to choose PFAs that best meet their needs.
Source: The Guardian