PFAs eye transfer window for N5bn new shareholders’ fund


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Chuks Udo Okonta

Pension Fund Administrators (PFAs) are banking on the Retirement Savings Account (RSA) Transfer Window, to generate more funds to meet the N5 billion recapitalisation mandate issued by the National Pension Commission (PenCom).

Inspenonline gathered from a reliable source that the Administrators are working assiduously to attract more subscribers which would help shore-up their funds.

The source also told this platform that most of the operators may be considering merger and acquisitions, adding that the discussions are presently taken at closed doors.

The sourced maintained that the recapitalisation process is progressing as planned without hassles.

According to PenCom a total number of 12,681 RSA holders have transferred N47.78 billion from their former Pension Fund Administrators to new operators as at the end of March 2021.

A statement by the Head, Corporate Communications, PenCom, Peter Aghahowa, noted that there is an overwhelming response by RSA holders to the opening of the RSA Transfer Window, adding that in the maiden transfer quarter, which ended on 31 December 2020, a total number of 2,799 RSA holders transferred their RSAs to various PFAs and that this number more than quadrupled in the next transfer quarter, which ended on 31 March 2021, as a total number of 12,681 RSA transfers took place.

He noted that a consistently upward trend is anticipated, as RSA holders continue to realise the ease with which they can initiate the transfer of their RSAs. Overall, the opening of the RSA Transfer Window is revolutionary. Going forward, high standards of service delivery will be a focal point in the Pension Industry, he said.

“It was a day long awaited, when the National Pension Commission opened the Retirement Savings Account (RSA) Transfer Window. The launching of the RSA Transfer System (RTS) on 16 November 2020, heralded the full implementation of one of the cardinal features of the Contributory Pension Scheme (CPS), the portability of RSAs. By this development, RSA holders have been empowered to move their RSAs from their current Pension Fund Administrators (PFAs) to other PFAs of their choice, whenever they desire to do so.

“The opening of the ‘Transfer Window’, as it is popularly referred to, has been embraced by a large number of RSA holders in their quest for better service delivery and returns on investment from PFAs. The Commission has ensured that the requirements for initiating RSA transfers are minimal, and has also made available on its website, necessary information to guide RSA holders through the process. Specifically, its publication of the ‘Frequently Asked Questions’ on RSA transfers, provides RSA holders with all they need to know about RTS,” he submitted.

He maintained that the RTS is a fully automated, efficient and transparent process that has pre-defined timelines and that it ensures hassle free movement of RSAs across PFAs.

He noted that as the transfer of RSAs involves movement of pension assets between PFAs, the entire process attracts the full weight of the Commission’s regulatory surveillance, stressing that the fact that the process has been completely free of charge has also given RSA holders an added advantage.

PenCom had said it increased the shareholders’ fund of Pension Fund Administrators (PFAs) from N1 billion to N5 billion so as to boost their capacity in terms of operational efficiency and service delivery.

PenCom stated this in a circular entitled: Revised Minimum Share Requirement for Licensed Pension Fund Administrators (PFAs), dated April 29, 2021 and sent to managing directors/chief executive officers of all licensed pension fund operators.

“The increase in the minimum regulatory capital is necessitated by the need to improve the capacity of PFAs, in terms of operational efficiency and effectiveness as well as service delivery,” PenCom stated.

The pension sector regulator noted that its board also approved a 12-month transition period, effective April 27, 2021, within which PFAs are to meet the new minimum capital.

“The board of the commission at its 48th meeting on April 27, 2021 approved the increase of the minimum regulatory capital (shareholders’ fund) requirement for PFAs from the current N1billion to N5 billion, unimpaired losses,” it said.

Director, Centre for Pension Rights Advocacy, Ivor Takor, mni Esq, said the new capital base is in order, whilst expressing optimism that the PFAs would be able to meet the expected fund.

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