CPS: RSA Transfer System Revolutionises
Nigerian Pension Industry
An essential advancement in Nigeria’s Contributory Pension Scheme (CPS) came with the introduction of the Retirement Savings Account (RSA) Transfer. This innovation allows RSA holders to seamlessly move their accounts from one Pension Fund Administrator (PFA) to another using the Retirement Savings Account Transfer System (RTS) deployed by the National Pension Commission (PenCom).
Section 13 of the Pension Reform Act 2014 (PRA 2024) allows RSA holders to transfer their accounts from one PFA to another not more than once a year. The commencement of the RSA transfers marks a significant achievement for PenCom in implementing the CPS. PenCom undertook the inhouse development and consequent deployment of the Enhanced Contributor Registration System (ECRS) in June 2019, which made it possible to commence the RSA transfers. The ECRS enabled the unique identification of contributors registered on the Commission’s database, a critical requirement for smooth RSA transfers.
The development of the RSA Transfer System (RTS) followed the ECRS. As the Application is tagged, the RTS is a unique and robust electronic platform that enables seamless RSA transfers. The Application is used for submitting, processing, and monitoring RSA transfer requests.
Meanwhile, to facilitate RSA holders’ ability to make informed choices on service delivery, the Commission has expanded its minimum disclosure requirements by providing more statistics on pension industry performance. A special section on the Commission’s website has been created, containing relevant information on the RSA transfer for the guidance of RSA holders.
In addition, the Commission has also developed the minimum information disclosure requirements to be adopted by all PFAs to enhance the high level of transparency required for the effective operation of the RSA Transfer System.
The RSA Transfer process
To initiate an RSA transfer, the RSA holder is not required to go to their current PFA (Transferring PFA). Instead, the RSA holder should approach the PFA they intend to transfer to (Receiving PFA) and provide their RSA PIN, surname, current telephone number and email address. The Receiving PFA will validate the biodata of the RSA holder requesting a transfer. Thereafter, the RSA holder’s fingerprint will be captured to authenticate their identity as the final step to conclude the transfer request. The Receiving PFA prints two copies of a confirmation slip, which the RSA holder should sign as proof that they initiated the transfer; finally, the PFA retains a copy of the confirmation slip while a copy is given to the RSA holder.
RSA transfer requests received through the RTS are batched and processed at the end of every quarter, four times a year (March, June, September, and December). However, only requests received latest by the end of the second month of a transfer quarter (February, May, August, and November) are processed within the quarter. All transfer requests received within the third month of a quarter are processed in the next quarter.
After a successful RSA transfer, the RSA holder should advise their employer of the new PFA for subsequent remittance of their monthly pension contributions. The RSA holder should also contact their new PFA to ensure that the RSA balance transferred is accurate.
Outlook of The RSA Transfer
Activating the RSA transfer is expected to result in improved service delivery across the pension industry as PFAs engage in healthy competition by providing enhanced service offerings to benefit RSA holders.
The RSA Transfer process has inbuilt controls that ensure only a legitimate RSA holder can initiate and transfer their RSA. One of the ways the controls are achieved is by verifying the RSA holder’s live fingerprint on the National Identity Management Commission (NIMC) database. Furthermore, there are strict administrative sanctions for infractions committed by PFAs, while PenCom monitors the entire process to ensure compliance.
Meanwhile, since the inception of the transfers, a significant number of RSA holders have transferred their RSAs from one PFA to another. For instance, in the last quarter of 2023, a total of 21,498 RSA transfer requests were submitted to PenCom by PFAs on behalf of RSA holders. Successfully processed RSAs are transferred to their PFAs, along with their associated pension assets.
In conclusion, the Commission urges all RSA holders to continue supporting the pension industry in maintaining ethical standards by basing their decision to transfer their RSA solely on objective considerations as the Commission and PFAs continue to provide better solutions to enhance Service delivery in the Nigerian Pension Industry.