Introduction
In August 2019, the National Pension Commission (PenCom) introduced the Data Recapture Exercise (DRE) in order to obtain complete, accurate and current data of all Retirement Savings Account (RSA) holders (both active and retired). Accordingly, Pension Fund Administrators (PFAs) were directed by PenCom to obtain the relevant information required for the DRE from RSA holders and the process is ongoing. One of the information required for the exercise is the National Identity Number (NIN).
Compliance with Section 13 of Pension Reform Act 2014
PenCom is desirous to ensure that all RSA holders are able to exercise their rights of transferring their RSAs from one PFA to another in anticipation of the formal launch of the RSA Transfer System during the last quarter of 2020. This is in line with the provisions of Section 13 of the Pension Reform Act (PRA) 2014.
The section provides that: “Subject to guidelines issued by the Commission, a holder of a retirement savings account maintained under this Act may not, more than once in a year, transfer his account from one Pension Fund Administrator to another”. PenCom therefore notified all RSA holders that completion of the DRE is a prerequisite for processing any RSA transfer request by RSA holders who registered before 1 July 2019. All employees who registered before that date did not produce NIN before registration.
Transfer of RSAs from one PFA to another
Employees from the commencement of the Contributory Pension Scheme in 2004 opened RSAs with PFAs whose pedigree where not known to them as they were all commencing the management of pension funds for the first time. Employees therefore relied only on the marketing strategies of the PFAs.
However, several years down the line, based on their performances and customer relations, the one-jacket-fits-all has been torn open. Employees and retirees are anxiously awaiting the approval of PenCom for the transfer, which is commonly referred to in the pension industry as the opening of the transfer window to commence.
The challenge of RSAs holders in complying with directive on DRE
The principal reason why most RSA holders have not been able to comply with the August 2019 directive of PenCom is the challenge of obtaining NIN. The National Identity Management Commission (NIMC) that has responsibility to issue Nigerians with NIN and with National Identity Cards has fallen short in discharging its responsibilities. Nigerians who registered for the National Identity Card over three years ago are yet to be issued with National Identity Cards. This has caused members of the public to be reluctant to go for registration with NIMC.
Shared Service Initiative by PenOp
In order to fast-track the DRE, PenCom has approved a proposal of the Pension Operators’ Association of Nigeria (PenOp) for an industry Shared Service Initiative (SSI). Consequently, PenOp has engaged agents to conduct the DRE on behalf of all PFAs. In partnership with NIMC, the selected agents will have the ability to carry out NIN registrations seamlessly.
The advantage of the Shared Service Initiative (SSI)
The Shared Service Initiative, initiated by PenOp and approved by PenCom, will help to facilitate the DRE. In the first place, the partnership with NIMC will facilitate the provision of NIN to RSA holders and retirees. Secondly, Section 11(1) of PRA 2014 provides that: “Every employee to whom this Act applies shall maintain an account, (in this Act referred to as “Retirement Savings Account”) in his name with any Pension Fund Administrator of his choice”.
This provision empowers each employee to choose his/her own PFA, which means that in one organisation, employees may have RSAs with as many as twenty PFAs; under an arrangement whereby a single agent can conduct the DRE on behalf of all PFAs of employees of an organisation, irrespective of their PFAs.
PenCom’s appeal to RSA holders for cooperation with agents on the DRE
PenCom in a recent press release issued on Tuesday 20th October, 2020, appealed to all active RSA holders and retirees to cooperate with the agents that would be visiting their organisations to carry out the DRE while pledging the Commission’s commitment to providing necessary support to the pension industry to ensure the success of the DRE.
Conclusion
The Shared Service Initiative will now aid a seamless DRE and places the responsibility of getting this done at the door steps of the PFAs, PenOp and Pension Desk Officers of the various organisations.
Comrade Takor mni, can be reached directly for comments and reactions via Email: takorivor@gmail.com; WhatsApp: +234 8037861900. Comments and observations can also be made through the interactive platform at the bottom of this page.
Related articles by the author:
Nigeria’s Contributory Pension Scheme
Pension Reform Act 2014: The Revised Regulation on Retiree Life Annuity: Part II
The Need for Review of Pension Reform Act
Pension Reform Act 2014: Compliance Issues With Regards To Employer
The Role of PENCOM in the Contributory Pension Scheme
Retiree Pack: Guideline For Retirees Under The Contributory Pension Scheme: Part II
Revised Guideline for Group Life Insurance for Employees
