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Funds Management

PENCOM fix Nov. 16 for launch of RSA Transfer System

November 16, 2020, has been set as the official date for the launching of the Retirement Savings Account transfer system.

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PFAs make N1.69 trillion ROI , Pension Contributions in Nigeria rose by N169.9 billion in 3-month , PenCom calls for thorough scrutiny of dead RSA holders’ benefits, PenCom discontinues Employee Death Benefit Account  , PFAs boost investment in infrastructure by N17.77 billion in one year , Pension: Low RSA balances - a subtly growing concern, PENCOM boss queried for spending unapproved funds, N5 billion on 360 staff in 8-month , How negative performance in the capital market affected PFAs in 2019, PenCom seeks pension bonds to clear N400 billion arrears as retirees groan, PenCom set to offer pension bonds to offset unpaid pension arrears, Is the pension asset just another cookie jar?, PenCom threatens companies with no insurance covers for their staff , PENCOM Notifies RSA holders on the mandatory data recapture exercise

The National Pension Commission (PENCOM) has set Monday, November 16, 2020, as the official date for the launching of the Retirement Savings Account transfer system.

This is according to a verified tweet by the organization, as seen by Nairametrics.

READ: Sacked workers cash in N2.56 billion in 25% early pension withdrawal

READ: Pension asset increases to N9.33 trillion – PenCom

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PENCOM also affirmed that prior to this launch, the commission had successfully developed the RSA Transfer Application, a robust electronic platform that would enable seamless RSA transfer. In addition, the commission had conducted extensive workshops for licensed Pension Operators and State Pension Bureaus in preparation of the epoch-making event.

What they are saying

A part of the recent press release by the organization read thus, “The National Pension Commission (the commission) wishes to inform all stakeholders and the general public, especially Retirement Savings Account (RSA) holders under the contributory pension scheme, that the commission has concluded arrangements for the take-off of RSA transfers.

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READ: Everything you should know about the Retirement Savings Account

“Accordingly, RSA holders may transfer their accounts from one Pension Fund Administrator (PFA) to another once in a year, in line with section 13 of the Pension Reform Act 2014. The launch date for the RSA Transfer System is scheduled for Monday 16 November, 2020. This will signify the official opening of the RSA Transfer Window.”

Why it matters

The latest development is in line with the commission’s desire to ensure that all RSAs holders are able to exercise their rights of transferring their RSAs from one PFA to another.

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1 Comment

1 Comment

  1. Omale omale

    November 9, 2020 at 10:41 pm

    Pls am a dimmsd officer my pfa is with trusfund pension,I have already collected 25%.but I want all my money paid into my Acnt since I no longer do anything for again, cos my money is just been tired there and am suffering with my family, pls is there any way ii can be helped so my total sum can paid into my acnt

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Funds Management

Before You Transfer: Best Pension Fund managers in Nigeria (2)

Pension fund managers based on the availability of information on the website, responsiveness to inquiries, and ease of navigation of the websites, among other factors.

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Sacked workers cash in N2.56 billion in 25% early pension withdrawal

In my last article on this, I did promise to continue the evaluation of pension fund managers with a view to providing RSA holders and investors with relevant information and data.

Here is the second part of that article.

Explore Financial Data on the Nairametrics Research Website

APT Pension Fund Administrators

This fund administrator has pricing information for the last 10 business days, meaning that if you are not a constant visitor to the site, you may miss some pricing information. Unfortunately, there is no historical price information available on the site. Pricing information for funds 1 and 3 are just getting published. Though the site publishes portfolio structure data showing what the funds invest in, there is no data on rates of return. The 2019 audited financial statement is available for download for all funds.

READ: Why African Alliance has not released its FY 2019 and Q1 2020 results

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Trust Pension Fund Administrators

This administrator seems to be the most prompt in publishing daily prices on their website, however, only the last 10 business days information is usually available. Again, this calls for frequent visitation to the site if you intend to capture the historical prices. The good part though is that the fund manager has the prices for the last day of each month on the website. Portfolio information detailing what the funds invest in is available as well as quarterly rate of returns. In addition to notifying RSA holders of the N100 flat admin fee charge, Trust Pensions has a fee chat that details management fees being charged for each fund. That is transparency in fees.

READ: NLPC and Sigma Pension Fund Administrators Take the Lead in Reporting and Transparency

NLPC Fund Administrators

NLPC reports the prices for all 5 funds for the last 7 business days. Again, this calls for frequent visits, at least weekly. Also available are the portfolio structure telling you what the funds invest in, approved rates of return, audited financial statements as well as chart of fees. The manager’s report is also available detailing each month’s performance for each fund.

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READ: PZ Cussons suffers a pre-tax loss of N7.984 billion in 2020

Fidelity Pension Fund Administrators

Fidelity Pension Fund Administrators is one of the best in reporting pricing information for all 5 funds, as it has the historical data in an analysis friendly format. However, there does not seem to be information on portfolio structure, no fee information, although past audited financial statements could be found on the site.

READ: PenCom okays N2.58billion for relatives of 591 deceased workers in three months

Premium Pension Fund Administrators

Premium Pension Fund Administrators is another fund manager that publishes pricing information in a way that is amenable to analysis.  The fund manager has information about the rate of return for the funds, but without dates, it is difficult to know what period the rate of return refers to.  The only fee information available is the admin fee charge. There is also portfolio structure information detailing the asset allocation for each fund on a daily basis. Also available are past audited financial statements.

READ: PenCom discontinues Employee Death Benefit Account  

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AXA Pension Fund Administrators

Following my earlier report on transparency in reporting, AXA pension fund now reports the pricing information of its pension funds in a beautifully laid out format that allows you to define a date range for the periods you need. Besides that, not much else is available on the sight as clicks on the return’s icon, and download icon came back empty or unresponsive.

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READ: President Buhari nominates Dr. Farouk Aminu as PenCom commissioner

VG Pension Fund Administrators

VG Pension Fund reports on all 5 funds (including micro pension fund) on their website. Also, on display is the rate of returns from 2017 as well as information on administrative fee charge. You can also see the portfolio structure information on what each fund invests in and in what percentage. Each fund’s current and past audited financial statements are also available for download from the site. Though there no return information, per se, the newsletters on the site show the year-to-date (YTD) return of each fund.

READ: Guide to Nigerian Pension Fund Contribution

Conclusion

I will be releasing a final part of this piece as it is not possible to evaluate all the PFAs in one or two articles. So, be on the lookout.

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Funds Management

President Buhari nominates Dr. Farouk Aminu as PenCom commissioner

Dr. Umaru Farouk Aminu has been nominated by President Buhari as a commissioner-elect in the National Pension Commission.

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President Buhari nominates Dr. Farouk Aminu as PenCom commissioner

President Muhammad Buhari has nominated Dr. Umaru Farouk Aminu as a commissioner-elect representing the North-West zone of the country in the National Pension Commission (PenCom).

This is according to a press release on the website of Pension Nigeria, as seen by Nairametrics.

READ: Nigerian pension funds increase exposure to foreign money market funds

According to the disclosure, the appointment of  Dr. Farouk was discussed at the Senate plenary session and subsequently forwarded to Committee on the establishment and public service matters for further legislative actions, which is to be reported back in two weeks.

READ: Lagos 2021 Appropriation Bill scales through second reading

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What you should know

  • Senator Yahaya Abdullahi moved the motion for the confirmation of the nomination of Dr. Farouk for appointment as full-time commissioner.
  • Senator Abdullahi affirmed that the nomination is in tandem with the provisions of Section 19(3) of the Pension Reforms Act, 2014.
  • In lieu of this, the request of the president C-in-C was referred to an ad-hoc committee for further hearing and considerations, with the mandate to report back in two weeks.

READ: How foreign exchange risks and others affect the Nigerian pension industry 

READ: PenCom okays N2.58billion for relatives of 591 deceased workers in three months

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Funds Management

The pros and cons of Pension Fund Administrator transfer

Here, we highlight some of the advantages and disadvantages of transferring from one Pension Fund Administrator to another.

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pension, October 2020 Pension Fund Performance Ranking

After my first article on the best pension fund managers in Nigeria, a few people have commented differently on the article.

In response to the comments, I have decided to do another article on the pros and cons of Pension Fund Administrator (PFA) transfer. Here are some of the advantages

Better Performance

The major reason for any investment is to make gains. Most investment gains are measured with investment performance. When a fund manager performs poorly relative to his or her peers and relative to the benchmark, he is due for a change. Therefore, an advantage of transferring from one PFA to another is that if the fund manager you transfer to has a history of consistently outperforming the peers and benchmark, you will benefit from the new fund manager’s higher performance.

Alignment with Risk Appetite

Each investor or RSA holder has his or her risk appetite and risk tolerance and different asset types or classes are suitable for different risk appetite. By looking through the portfolio structure of different PFAs, it is possible to know which PFA’s asset allocation best aligns with your risk appetite. Therefore, you get the advantage of aligning the PFA’s asset allocation to your risk appetite by transferring to the PFA whose asset allocation is in agreement to your risk make up.

Fund Manager Fee Management

Although the National Pension Commission, PenCom, has guidelines about the type of fees that fund managers should charge, there are slight disparities in fees charged by different PFAs. By reviewing the fee charts of different PFAs, you may be able to transfer to a PFA in such a way that you save on fees without sacrificing other beneficial services.

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Experienced fund manager

It has been said that in fund management, asset allocation is everything. A fund’s performance depends so much on the asset allocation of the fund manager. Experience plays a big role in asset allocation. So, by transferring to a more experienced PFA, you stand the chance of benefiting from the experience of a fund manager through his asset allocation prowess.

There are also disadvantages from transferring from one PFA to another, below are some of them:

  • Loss of Relationship: A disadvantage to switching from one PFA to another is that you may lose the relationship you have created or built with your old PFA and need some time to create that same relationship with the new PFA.
  • Loss of market rally: When you switch PFAs, your old PFA has to transfer your account balance to the new PFA. Transferring from one PFA to another creates a gap in investment and you may miss any market rally that may occur during that gap. There is usually a cut off date for such transfers. So, if there is a market rally, by way of price increases within the gap period, you will miss out on that rally.

Conclusion

It is not mandatory that you transfer your RSA during a given transfer window, if you are happy with your current PFA’s performance, fees, etc, then stick with them, after all, past performance is not a guarantee for future performance and the devil you know, may be better than the angel you do not know.

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