The Pension Fund Operators Association of Nigeria has said it will introduce four pension service solution providers starting April 1, 2025, to standardise pension remittance in the sector.
The Chief Executive Officer of PenOp, Oguche Agudah, made the disclosure during a presentation at the 2024 PenCom Media Conference held in Lagos.
The Pension Fund Operators Association of Nigeria is the trade association and umbrella body of all licensed pension funds in Nigeria. It was established to promote the operations of the pension industry in Nigeria, provide for self-regulation, and ensure that international best practices relating to the industry are observed by the operators registered in Nigeria.
Highlighting some of the challenges with the current system of remittance, which included uncredited retirement savings accounts and operators getting remittances without a schedule, Agudah said technology is the way to resolve those challenges.
“We are working on a technology system whereby we are engaging some firms that we call the Pension Service Solution Providers. The industry will work with these solution providers, including PayPen by Netline Ltd., Paythru by Pethahiah by Rehoboth International Ltd., Pension Central by Chams, and Cyberpay by Cyberspace Ltd., to ensure that everyone who is paying pension from April 1 has to go through this model.
“What will happen is that when the employer pays pension, it goes straight to the RSA holder. There are going to be four of them that we have engaged now. With these, there is going to be a standardised remittance template. There will also be validation checks to eliminate instances of We got money, but don’t know where it’s coming from. We are also going to do awareness and will be looking to you guys for help between now and April 1 so that employers will know that from April 1, you can just go to the bank and say help me send my pension. It will not go again. The result is that RSA holders will get their pension.”
Agudah, however, added that the new model will have no cost implications for employers.
Other benefits of the new model are enhanced accuracy and efficiency; standardised templates will lessen the administrative workload for pension fund administrators, custodians, and employees.
“A more transparent remittance process allows for better tracking and reporting, which can enhance trust among stakeholders, including employees, employers, and regulatory bodies.
“A well-functioning pension system contributes to economic stability by mobilising long-term savings for investment in various sectors. Timely pension remittances enhance this effect by ensuring that funds are available for investment purposes” were some of the other benefits that Agudah highlighted.