• Friday, June 21, 2024
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9m contributors await transfer window as PenCom puts Covid-19 behind

Unstructured deals mar PFAs from infrastructure investment

Over nine million contributors already registered with the different Pension Fund Administrators (PFAs) are set to port to their choice PFA when transfer window opens by the end of this year.

The scheme, which ought to have started since first quarter of 2020 according to the regulator’s timetable, could not make headway as a result of coronavirus (COVID-19) pandemic and lockdown of interstate travels.

But hope is coming on the heels of a new announcement by the National Pension Commission (PenCom) that it is ready to commence capacity building for stakeholders since lockdown of interstate travel and Covid-19 have been relaxed.

There are currently 9,039,748 registered contributors and total pension asset under management valued at N11.085 trillion as of June 30, 2020.

Section 13 of the Pension Reform Act, 2014, allows contributors to move their Retirement Savings Account (RSA) through a transfer window from one Pension Fund Administrator (PFA) to another, provided that it is not more than once in a year.

It is expected this will affect negatively some PFAs whose services in terms of returns on investment as well as customers relations have not been excellent, and therefore working in favour of those who have done better.

PenCom in a statement released last week said it had been working assiduously to actualise the provisions of Section 13 of the Pension Reform Act, 2014, stating that preparatory to the opening of the Transfer Window, the Commission developed and deployed the Enhanced Contributor Registration System (ECRS) in September 2019.

It noted that the Commission had developed the RSA Transfer System (RTS), a robust electronic platform that would enable seamless RSA transfers.

“PFAs would be able to utilise the RTS platform for the submission of RSA transfer requests. The full deployment of the platform would however entail extensive training of the PFA’s relevant personnel and simulation of the processes, industry-wide.”

According to the Commission, PenCom was unable to carry out these activities as planned due to the nationwide lockdown because of the Covid-19 pandemic.

“Subsequent to the easing of the lockdown by the Federal Government and the lifting of the ban on interstate travels between the end of June and July, 2020, the preparations for a comprehensive training plan were concluded,” it noted.

The Commission said it was currently holding workshops on the RTS for the Pension Operators, which would run from August 10 – 28, 2020, and also expects that in line with the plan, operators would participate in an industry simulation of transfer processes and simulations in September 2020.

“The opening of the transfer window will facilitate full and equitable pension assets portability within the pension industry, enhance ethical competition among the PFAs and improve service delivery to RSA holders, PenCom,” it said.

The Commission is optimistic that all necessary preparations will take place to enable opening of the RSA Transfer Window by the end of the year.