The National Pension Commission (PenCom) has issued a strong warning to Pension Fund Administrators (PFAs) and employers against coercing Retirement Savings Account (RSA) holders to switch administrators, describing such actions as illegal and unethical.
In a circular titled PenCom/INSP/SURV/Aut/2025/1013, dated 16 June 2025, and addressed to all licensed pension fund operators and employers, the Commission condemned the rising trend of undue influence in RSA transfers. The document, titled ‘Illegal and Unethical Practices Regarding Opening of Retirement Savings Account (RSA) and Retirement Savings Account Transfer’, emphasizes that violators will be barred from participating in the RSA transfer window.
According to the circular, any defaulting PFA will be restricted to acting solely as a transferring PFA and will not be allowed to receive new RSA transfers. Additionally, PenCom warned that individuals or employers who infringe on the statutory rights of employees to freely choose or transfer their PFAs will face criminal prosecution, in line with the provisions of the Pension Reform Act (PRA) 2014 and relevant subsidiary legislation.
PenCom noted its concern over the increasing number of reports involving financial institutions and employers—some including vendors—who coerce or unduly influence workers to open or transfer their RSAs to specific PFAs.
The regulator reaffirmed its commitment to ensuring transparency, ethical practices, and the protection of contributors’ rights in the pension industry.
