The National Pension Commission (PenCom) has cautioned Pension Fund Operators and employers against coercing workers into opening or transferring their Retirement Savings Accounts (RSAs) with specific Pension Fund Administrators (PFAs).
PenCom stressed that such acts contravene the Pension Reform Act 2014, which guarantees employees the right to choose any licensed PFA to manage their pension funds.
According to the regulator, some Pension Fund Operators and employers have been compelling their staff — and in some cases vendors — to register or transfer their RSAs with PFAs directly linked to the employer, or indirectly tied through Pension Fund Custodians (PFCs).
In a circular dated June 16, 2025, and titled “Illegal And Unethical Practices Regarding Opening of RSA And RSA Transfer”, PenCom warned that such practices are unlawful and attract criminal liability.
The circular, signed by the Head of Surveillance Department, A. M. Saleem, stated that the commission would not hesitate to prosecute any employer or individual infringing on employees’ statutory rights.
PenCom further emphasized that employees must be allowed the freedom to make independent choices in line with the law, and urged all Pension Fund Operators and employers to immediately desist from the illegal practice.
