Workers dump PFAs, N822bn transferred to new operators

No fewer than 203,127 workers have changed their Pension Fund Administrators and moved N822.37bn from their Retirement Savings Accounts since the National Pension Commission opened the window of transfer.

PenCom disclosed this in its transfers report on ‘Quarterly summary of Retirement Savings Accounts transferred by Pension Fund Administrators’ from the fourth quarter of 2020 to the second quarter of 2023.

According to PenCom, 34,359 workers moved N158.6bn in the second quarter of 2023, from 24,963 who moved N111.67bn in the first quarter of 2023.

The figures disclosed that 2,799 contributors moved N18.9bn in the fourth quarter of 2020; 12,681 contributors moved N47.78bn in the first quarter of 2021; 10,166 moved N35.89bn in the second quarter of 2021; 12,872 contributors moved N45.56bn in the third quarter of 2021; while 12,874 contributors moved N42.49bn in the fourth quarter of 2021.

It added that 12,336 contributors moved N36.36bn in the first quarter of 2022; 14,821 moved N50.22bn in the second quarter of 2022; 30,973 moved N143.1bn in the third quarter of 2022; while 34,283 moved N131.76bn in the fourth quarter of 2022.

The number of workers changing PFAs continued to rise after PenCom barred the PFAs from sending gifts to RSA holders in 2022.

PenCom said it took the measure to stop unhealthy competition in the industry.

The PFAs used to send birthday gifts to workers nearing retirement to woo them to stay with them after retirement.

They also sent out corporate gifts to many of their RSA holders and clients at the end of the year before the ban.

This became more pronounced after the window of transfer allowed workers to move their savings from a PFA to another of their choice once a year.

Section 13 of the Pension Reform Act 2014 specifies that a Retirement Savings Account holder may transfer his RSA from one PFA to another.

It added that such transfer should not be more than once a year.

The pension industry regulator stated that PFAs must only process requests for RSA holders registered on the Enhanced Contributor Registration System and those whose recaptured information had been successfully uploaded onto the ECRS.

“PFAs shall only process RSA transfer requests for eligible RSA holders who have not transferred their RSAs within the last 365 days using the RTS, irrespective of whether it is a leap year or not,” it stated.

PenCom opened the transfer window in November 2020, which allowed contributors to change their PFAs.