As of the third quarter of 2024, over 312,000 Retirement Savings Account (RSA) holders have transferred a substantial N1.41 trillion to different Pension Fund Administrators (PFAs), following dissatisfaction with their current providers.
This development, revealed in the latest Quarterly Summary of Retirement Savings Accounts Transfer by the National Pension Commission (PenCom), spans from the fourth quarter of 2020 to the third quarter of 2024.
PenCom’s report highlights a significant trend of RSA holders seeking better management of their pension funds. The large-scale transfers indicate mounting dissatisfaction over issues such as poor returns on investment, lack of transparency, and subpar customer service by their previous PFAs.
In their quest for improved service and performance, these dissatisfied account holders have opted to move their savings to firms they perceive to be more reliable and efficient.
The volume of funds transferred — totaling N1.41 trillion — underscores the growing demand for better pension fund management in Nigeria. This shift not only represents a significant portion of the country’s pension assets but also points to the increasing power RSA holders have in holding PFAs accountable for their performance.
While PenCom continues to monitor the situation, the mass exodus of funds raises critical questions about the future of the pension sector. It signals a potential crisis for PFAs that fail to improve their services or meet the evolving expectations of the Nigerian workforce, which is becoming more financially literate and more discerning in choosing pension providers.
The report also serves as a call to action for pension administrators to review their investment strategies, service delivery, and customer relations. With more Nigerians seeking to safeguard their future through better-managed pension plans, PFAs must adapt to the demands of the market or risk further erosion of their customer base.
As the pension sector faces increasing pressure, both PenCom and pension providers must take urgent steps to address the underlying issues driving this large-scale fund migration. Only time will tell how the industry will respond to this growing discontent and whether the necessary reforms will be put in place to restore confidence in the system.
