Pension administrators trade 12,681 RSA accounts worth N47.78bn in Q1

RSA accounts

Pension administrators trade 12,681 RSA accounts worth N47.78bn in Q1



Transfer of Retirement Savings Accounts (RSA) among Pension Fund Administrators (RSA) in Nigeria hit a new height in the first quarter of 2021.

Data obtained from the National Pension Commission (PenCom) by Business Metrics revealed that during the period, a total of 12,681 accounts valued at N47.78 billion were moved by their holders from one PFA to another.

It is calculated that compared to the preceding fourth quarter (Q4) of 2020 when just 2,799 RSA account worth N18.9 billion were exchanged between pension administrators, the Q1 2020 experience was 353.1 per cent and 152.8 per cent higher in terms of total affected accounts and the money they held respectively.

What you should know

A Retirement Savings Account (RSA) is a Defined Contribution Plan required under the Pensions Reform Act 2014. It can be opened by every employee in an organization with 3 staff or more.

Staff will be required to open and maintain a personal Retirement Savings Account (RSA) in their own names after which they would be issued a unique Personal Identification Number (PIN) by the National Pensions Commission. Monthly deductions and remittances of 10% and 8% of total monthly emolument are contributed by the employer and employee respectively into the RSA.

The overall aim is to ensure that upon retirement, loss of job, invalidity or death, employees under the scheme would have access to some income through the various pension options.

Transfer of RSA accounts

It will be recalled that the transfer window known as Retirement Savings Account Transfer System (RTS) was launched by the National Pension Commission, PenCom, on the 16th of November, 2020 in Abuja, in accordance with Section 13 of the Pension Reform Act, 2014.

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

Also recall that immediately after the launch, over 2,100 RSA holders applied to move their pension accounts from their current PFA to a new one.

What the transfer implies

Speaking on the development at a virtual training, Head, ICT, PenCom, Mr. Polycarp Anyanwu, said that most of the contributors that switched to new PFAs were not satisfied with the service delivery of their former PFA.

Anyanwu, however, said that the development will enhance quality service delivery at the PFAs.

Also speaking, Head, Corporate Communications, PenCom, Mr. Peter Aghahowa, has said that the activation of the RSA transfer process will engender competition and improve service delivery in the pension industry, while asserting the right of RSA holders to determine which PFA manages their pension contributions and retirement benefits.