What to consider when choosing a pension manager

As a pension contributor, you have opportunity to change your Pension Fund Administrator (PFA) following approval of the Transfer Window.

This window provides an avenue for contributors otherwise called Retirement Savings Account (RSA) holders who are not satisfied with the services of their current PFA to migrate to the PFA of their choice.

The question now is what should make an RSA holder consider changing his or her PFA and these analysts, say are critical in making the right choices.

Michael Oyebola, analysts at moneyCouncellors looking at understanding the PFAs and their performance said, as a pension saver in Nigeria, understanding the performance of your Pension Fund Administrator (PFA) is paramount.

According to him, regularly reviewing their results over different periods, say -Current Year-To-Date (YTD), 1 year, 3 years, 5 years, and since inception can significantly impact your retirement planning and financial security.

On insight into performance trends, he said evaluating your PFA over various periods offers insights into how well your retirement savings are being managed. It helps identify trends, ensuring your investments are aligned with your retirement goals.

He also emphasised benchmarking, stating that comparing your PFA’s performance against benchmarks and peers (i.e., other PFA’s) over these periods can highlight its effectiveness.

“It’s an essential step in ensuring your PFA is competitive and maximizing your potential returns.”

According to him, ability of the PFA to align with appropriate risk management is essential.

“Understanding performance over time helps in assessing the risk management strategies of your PFA. Different periods can reveal how your PFA navigates market volatility, which is crucial for safeguarding your investments.”

Also critical to making choices is making informed decisions.

“Armed with this knowledge, you’re better positioned to make informed decisions. Whether it’s sticking with your current PFA or considering a switch to another one, regular reviews empower you to take charge of your future today.”

Remember, your retirement savings are your future. You cannot normally access it until you’re 50 or certain other defined circumstances. Take the time to review, assess, and ensure it is in the right hands, Oyebola said.

Data compiled by analysts at MoneyCounsellors shows fund performance of PFAs since inception.

For Instance, StanbicIBTC Pension Managers led in Fund 1 with 163.07 percent, followed by NPF Pensions with 133.61 percent. Others are Veritas Glanvills Pensions with 114.84 percent, Leadway Pensure PFA with 113.96 percent and Access Pensions with 104.96 percent.

CrusaderSterling Pensions lead Fund 11 with 728.49 percent, followed by Premium Pensions 667.89 percent; others are ARM Pensions 621.65 percent, PAL Pensions 611.53 percent and StanbicIBTC Pension 589.89 percent.

Fund 111 is led by NPF Pensions with 115.61 percent, followed by Tangerine Pensions with 111.08 percent; Others are Radix Pensions 108.07 percent; CrusaderSterling Pensions 107.80 percent, and Fidelity Pensions 103.10 percent.

Fund IV, is led by StanbicIBTC Pension Managers, with 556.18 percent, followed by OAK Pensions 493.70 percent; others are Glanvill Pensions 481.64 percent; NLPC PFA 481.37 percent and ARM Pensions 473.98 percent.

For Fund V, StanbicIBTC Pension Mangers led the table with 65.88 percent, followed by Veritas Glanvills Pensions with 51.23 percent. Others are PAL Pensions 47.92 percent; FCMB Pensions 46.51 percent and NLPC PFA with 45.81 percent.

Fund V1-Non-interest (Active) was led by NLPC with 40.92 percent, followed by Nupemco 40.92 percent. Others are Access Pensions 35.28percent; ARM Pensions 31.24 percent and FCMB Pensions 31.11 percent.

While FundV1, that is, Non-Interest (Retiree) is led by Access Pensions with 34.88 percent, followed by Premium Pensions with 30.28 percent. Others are Stanbic IBTC Pensions 27.79 percent; FCMB Pensions 25.62 and Vritas Glanvills 25.24 percent.

Pension Transfer Window introduced in 2020 by the National Pension Commission (PenCom) allows contributors otherwise called Retirement Savings Account (RSA) holders the flexibility to move their funds from one PFA to another at least once every two years.