Nigeria: PenOp to Introduce New Pension Service Providers

The Pension Fund Operators Association of Nigeria (PenOp) has announced plans to introduce four pension service solution providers starting April 1, 2025. This initiative aims to standardize pension remittance processes within the sector.

Speaking at the 2024 PenCom Media Conference in Lagos, the Chief Executive Officer of PenOp, Oguche Agudah, revealed the development. According to Agudah, this move will address key challenges in the pension remittance system, such as uncredited retirement savings accounts and the receipt of remittances without proper schedules. “Technology is the way to resolve those challenges,” he stated.

PenOp, the umbrella body for all licensed pension funds in Nigeria, is dedicated to promoting industry operations, fostering self-regulation, and ensuring adherence to international best practices.

Streamlining the Pension System with Technology

Agudah outlined the new approach, which involves collaboration with four Pension Service Solution Providers:

• PayPen by Netline Ltd.
• Paythru by Pethahiah of Rehoboth International Ltd.
• Pension Central by Chams Plc.
• Cyberpay by Cyberspace Ltd.

“From April 1, employers paying pensions will be required to use this model. The system ensures that payments go directly to the RSA holder. This standardized remittance template and validation checks eliminate discrepancies such as untraceable funds,” Agudah explained.

He added that awareness campaigns would run until the implementation date to educate employers about the new process. Notably, this transition will not impose additional costs on employers.

Benefits of the New Model

The adoption of this model offers multiple advantages, including:

• Enhanced Accuracy and Efficiency: Standardized templates will reduce the administrative burden on pension fund administrators, custodians, and employees.
• Improved Transparency: A streamlined remittance process will allow for better tracking and reporting, fostering trust among employees, employers, and regulators.
• Economic Stability: A well-functioning pension system mobilizes long-term savings for investment across various sectors. Timely remittances ensure funds are readily available for such purposes.

“This initiative will revolutionize the pension industry, ensuring RSA holders receive their entitlements seamlessly while enhancing trust and efficiency within the system,” Agudah emphasized.