PensionTalk
Since the introduction of the Multi-Fund structure regime (aka Life Cycle investment structure) into the Nigerian pension industry in July 2018, there have been series of questions regarding the operations of the multi-fund structure.
In this second article on the Multi Fund structure, we look at the different movements that occur between the RSA Funds. You can read the first part of this article here.
Movement Between Different Funds
One of the new introductions of the Multi Fund structure is the ability to move from one Fund to another depending on the contributors’ age and risk appetite.
Only two movements are allowed in a year. The first movement initiated by the contributor is free. However, any subsequent movement initiated by the contributor within 12 months after the first request will be subject to a fee by the PFA.
Some movements are automatic while some are made at the instruction of the contributors.
Movement From Fund I To Other Funds
A contributor will move from Fund I to:
- Fund II (by choice provided s/he is less than 50 years old)
- Fund III (automatically when he turns 50 years old and still working)
- Fund IV (automatically on retirement)
- Fund VI (by choice)
Movement From Fund II To Other Funds
A contributor will move from Fund II to:
- Fund I (by choice provided s/he is less than 50 years old)
- Fund III (automatically when he turns 50 years and still working)
- Fund IV (automatically on retirement)
- Fund VI (by choice)
Movement From Fund III To Other Funds
A contributor will move from Fund III to:
- Fund II (by choice)
- Fund IV (automatically on retirement)
- Fund VI (by choice)
Movement From Fund IV To Other Funds
A contributor in Fund IV is allowed to move to Retiree Fund VI ONLY. These are the Funds for retired employees.
Movement From Fund V To Other Funds
A contributor in Fund V (Micro Pension Plan) who is eligible to move or be converted from MPP to the CPS will be moved appropriately to the Fund he or she is qualified to move to upon formal request to the PFA providing all necessary documents.
Therefore, they can move to the following Funds depending on their choices and circumstances:
- Fund I (by choice provided they are less than 50 years old).
- Fund II (automatically if they are less than 50 years old except they choose to go to Fund I)
- Fund III (automatically if they are 50 years old and above except they choose to go to Fund II)
- Fund IV (automatically if they meet the conditions of being a retiree at the date of conversion)
- Fund VI (by choice)
Movement From Fund VI To Other Funds
RSA holders in Fund VI can move to the other funds as follows:
- Funds I, II and III for Active RSA holders (by choice)
- Fund IV for Retiree RSA holders (by choice)
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