Pension

Transfer Window: PenCom’s laxity stalls contributors’ hope

Aisha Dahir-Umar

By Sunday Ojeme

The expectation by pension contributors under the Contributory Pension Scheme (CPS) to switch from their original Pension Fund Administrators (PFAs) to another of their choice has been stalled due to the current management of National Pension Commission’s (PenCom) inability to deal with the situation.
New Telegraph learnt that the change in management at the commission has partially put a stop to a number of initiatives including the Transfer Window, otherwise known as account portability.

According to Section 11(2) of the Act, employee may, not more than once in a year, transfer the Retirement Savings Account (RSA) from one Pension Fund Administrator (PFA) to another without adducing any reason for such transfer.

However, in the last three years since the Act was reviewed, it has become herculean for PenCom to take a final decision on the implementation of the transfer window policy, thereby getting the contributors, who are eager to change their fund managers, a little bit confused.

Although industry operators’ position on the vexed issue has been that of reassurance, the delay in its implementation is, however, giving weight to some PFAs’ perceived poor conduct in dealing with retirees, who feel dissatisfied with their services.

As part of its defence, PenCom had said it was developing guidelines and other infrastructure to enable it open the transfer window in the face of complaints by some contributors of poor service delivery from some of the PFAs.

While enjoining stakeholders to be patient, the commission stated that for effective take off of the transfer window, it was putting in place infrastructure and modalities that would enable the clean-up of existing registration database to eliminate multiple registrations, thereby facilitating opening of the transfer window.

Specifically, the regulator said in line with the provisions of the Act, it had already released the regulations for the transfer of RSA to pension operators and also displayed same on its website.

Part of its defence was that a major challenge hindering the opening of the transfer window was the issue of RSA holders registering more than once through their PFAs on the Commission’s database and lack of accurate biometrics.

An indication to that effect was also amplified by a former Chairman of Pension Operators Association of Nigeria (PenOp), Mr. Misbahu Umar Yola, while giving assurance that the guidelines to be released by PenCom would deepen investment and also allow for flexibility in the system.

However, more than two years after the assurance, the issue of data and multiple registrations has continued to remain an unresolved matter as far as implementing the policy is concerned.

As part of the unending reassurance, one of the industry stakeholders, who spoke on the condition of anonymity, had reaffirmed the commission’s resolve to begin the process of implementing the scheme in no distant time through the harmonisation of data being collated by various institutions as a way of guarding against multiple identifications.

“It is going to be very difficult to really move people around in terms of their choices because we are talking of life savings here,” he said.

“Pension fund management is a very delicate business; you cannot work for 30 or 35 years and then wake up one day and find that you have lost your money. So, we have been very careful with the system that we put in place.

“We have had to ensure that right structures are in place to enable us adhere strictly to the guidelines laid out by PenCom with regard to the movement of customers across the Pension Fund Administrators (PFAs).”

The frequent reassurance from the operators was further stepped up by the Managing Director of Leadway Pensure, Mrs. Ronke Adedeji, who said a lot still needed to be done to achieve the standard required.

According to her, “the transfer window is quite a complex exercise, on the face, it always appears very simple. People always say, ‘I want to change my PFA and move from A to B,’ but its complex from the perspective that when you are moving an account from one PFA to another, certain processes need to take place and the major one is the identification process. We want to make sure that when you are transferring account from one entity to the other, you are transferring correctly and that you are not transferring somebody else’s account simply because they have common names.”

She pointed out that the issue of biometrics was the key in order for the process to be secured.

“In Nigeria, we really haven’t sorted out identification, but in more developed parts of the world, identification is quite simple and straightforward,” she noted.

Accordingly, the President of Pension Operators Association of Nigeria (PenOP), Mr. Eguarekhide Longe, affirmed that issues concerning the transfer window were being dealt with and the parties taking their time to ensure things are done perfectly.

“I guess I need to describe what needs to happen. There should be pension software that can take the biometric information that need to be captured, a robust system that captures the registration and can continue to update the records as we go along.

“What PenCom saw was that the contributory registration system was not robust enough to deal with the biometric information that has to be captured and so, they decided to migrate to a more robust system, which is the pension administration software.

“We do not want people transferring accounts that do not belong to them. We need to be sure of who is transferring what. And that is the clean-up exercise that needs to be done and with this new system that we are acquiring and the assigning of responsibilities to all the parties, I cannot say for certain when all of these will end, but there is active work in progress, which needs to be done so that we do not race into implementation when we can take our time and do it well once and for all,” he posited.

New Telegraph

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