Transfer season: Nigerians’ hunt for pension returns sees 19% surge

When Peter Ukwong, a 53-year-old estate surveyor working at a German construction company in Port Harcourt, decided to switch his Pension Fund Administrator (PFA) two years ago, not many of his colleagues realised he wanted to take charge of his financial future.

For him, he was just waking up to a new reality, having monitored the returns on his pension savings and flexibility in other service providers that he could not find in his PFA over the past years.

But two years later, many of his colleagues have seen that he was right in taking charge of his pension savings, with improvements in returns as well as improved service delivery.

Ukwong is one of a growing number of Nigerians taking a more active role in managing their retirement savings, as was described in a recent data released by the National Pension Commission (PenCom)

The PenCom Dashboard shows that 27,701 Retirement Savings Account (RSA) holders moved from one PFAs to another in the first quarter (Q1) of 2025, transferring N191.12 billion, a 19.27 percent increase compared to the fourth quarter (Q4) of 2024 when 23, 226 RSA holders moved N141.87 billion.

The rise points to a shift in awareness and empowerment among workers who are no longer willing to settle for underperforming pension fund managers or poor customer service.

Experts say the increase in transfers reflects a combination of factors, including greater financial literacy, improved digital access to pension data, mounting pressure and increasing competition among PFA.

“For many Nigerians, it’s no longer enough to just save for retirement, but to grow the savings, monitor them closely, and hold fund managers accountable,” a pension analyst said.

Read also: PenCom stands strong on employee’s right to choice of PFAs

With increasing competition among PFAs to win new customers and retain old ones, there are concerns of some regulatory breaches targeted at forcing RSA holders to move to specific operators.

PenCom, in a recent circular to licensed pension fund operators, observed with concern the illegal and unethical practices by certain financial institutions and employers, where their employees and those of their vendors are being coerced or unduly influenced to open or transfer their RSAs to specific PFAs, particularly those directly affiliated with the employers or indirectly through the custody of their pension assets with Pension Fund Custodians (PFCs).

PenCom in the circular entitled, ‘Illegal and Unethical Practices Regarding Opening of Retirement Savings Account (RSA) and RSA Transfer’ signed by A.M Saleem, its head of surveillance, said: “It is the right of employees to choose PFAs of their choice, or transfer to any without being coerced by either their employers or the operators.”

According to the Commission, the choice of PFA and RSA transfers is the statutory right of RSA holders and must not, under any circumstance, be influenced by their employers or their affiliates.

“Any act of inducement or compulsion, whether direct or indirect, undermines the integrity of the Contributory Pension Scheme (CPS) and the credibility of the RSA Transfer Process,” the circular said.

According to the Commission, “This practice is unacceptable and constitutes a clear violation of the following provisions of the Pension Reform Act (PRA) 2014 and relevant Regulation/Circulars issued by the Commission.”

The Commission said Section 11(1) of the PRA 2014 provides that every employee to whom the Act applies shall maintain a RSA in his/her name with any PFA of his/her choice.

Section 13 of the PRA 2014 also provides that, subject to the guidelines issued by the Commission, a holder of an RSA may transfer his/her account from one PFA to another.

While Section 2.3 of the Commission circular on RSA transfers explicitly prohibits employers from influencing the choice of PFA by employees.