By 
The National Pension Commission (PenCom) has issued a stern warning to financial institutions and employers, cautioning them against any form of interference in employees’ choice of Pension Fund Administrators (PFAs) or the transfer of Retirement Savings Accounts (RSAs).
In a circular signed by A.M. Saleem, Head of PenCom’s Surveillance Department, the Commission highlighted growing concerns over unethical practices whereby employers and certain financial institutions—particularly those with affiliated PFAs—are coercing employees or third-party vendors into selecting or transferring their RSAs to specific PFAs.
PenCom described such actions as “unacceptable” and in violation of the Pension Reform Act (PRA) 2014, along with associated regulations and guidelines. The Commission emphasized that employees have a statutory right to freely choose their PFA and initiate RSA transfers without undue influence.
“The choice of PFA and RSA transfer are the statutory rights of RSA holders and must not, under any circumstances, be influenced by employers or affiliated parties,” the Commission stated. “Any form 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 further instructed all licensed Pension Fund Operators and employers to refrain from any activities that involve soliciting, coercing, or influencing employees’ pension decisions. Pension Fund Custodians (PFCs) were also reminded of their fiduciary responsibilities and mandated to report any attempts by affiliated entities or employers to infringe on the rights of RSA holders.
PenCom issued a strong warning that violators would face regulatory consequences, including monetary penalties, suspension from the RSA transfer process—permitting only outgoing transfers—and possible criminal prosecution.
This regulatory move is particularly relevant for financial institutions operating under a holding company structure with a PFA subsidiary, underscoring PenCom’s broader agenda to ensure transparency, competition, and trust within Nigeria’s pension ecosystem.
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