RSA Transfers: Empowering Pension Contributors

RSA Transfers: Empowering Pension Contributors

In November 2020, the National Pension Commission (PenCom) introduced the RSA Transfer System, allowing Retirement Savings Account (RSA) holders to switch Pension Fund Administrators (PFAs). This reform promotes competition and enhances service quality in Nigeria's pension industry.

RSA Transfers Trend (2020-2024)

• The system saw a slow start in 2020 but gained momentum in 2021.
• Transfers peaked in 2022 and 2023, with 2024 slightly below 2023 but still above 2022.
• The trend suggests increasing awareness and market activity.

Value of Pension Funds Transferred

• Transfers grew from ₦19 billion in Q4 2020 to ₦172 billion in Q4 2024.
• Major peaks: ₦143 billion (Q3 2022), ₦159 billion (Q4 2022), and ₦172 billion (Q4 2024).
• The increasing value suggests confidence in the system and participation from higher-income earners.
• Growing competition among PFAs is driving better services and investment options.

How to Transfer Your RSA

Switching PFAs is a structured process ensuring security and efficiency:

1. Data Recapture: Update your details with your current PFA, which they will do through PenCom’s Enhanced Contributor Registration System (ECRS).
2. Submit a Transfer Request: Approach your preferred PFA and provide required details (name, surname, RSA PIN, email, phone number, NIN, BVN, etc.).
3. Identity Verification: Your fingerprint will be authenticated against the National Identity Management Commission (NIMC) database.
4. Fund Transfer: At the end of the transfer quarter, PenCom will oversee the transfer of your RSA funds.
5. Notification: Both PenCom and your new PFA will confirm the transfer completion.

Key Factors to Consider Before Switching PFAs

• Service Quality: Choose a PFA with responsive customer service.
• Investment Performance: Review historical returns to ensure steady growth.
• Regulatory Compliance: Ensure the PFA adheres to industry regulations and IFRS standards.
• Employer Policies: Public sector employees should confirm employer-approved PFAs before switching.

Conclusion

The RSA Transfer System empowers contributors to choose PFAs that best align with their financial goals. With the option to transfer once every 365 days, contributors can optimise their retirement savings by selecting PFAs with superior performance and service. Evaluate your options, stay informed, and make the best choice for your future.