Saturday 30 March 2013

Trouble looms as pension transfer window opens

Chuks Udo Okonta

The quest by some Pension Fund Administrators (PFAs) especially the smaller firms, to increase their subscribers base through the transfer window may create room for unhealthy competition among others if not checked, Inspen can reveal.

Investigation has shown that smaller pension fund administrators are pushing hard for the opening of the transfer window to enable them capture contributors that are presently dis-satisfied with their PFAs.

Industry observers believe this may bring about demarketing, which is rampant in the financial services sector. The observers noted that the industry regulator - National Pension Commission (Pencom) must place stringent laws to deter operators with such notion.

They maintained that the industry can only continue to thrive if there are trust and cooperation between operators and the public, noting that introduction of falsehood or demarketing by operators in a bid to increase their market share would stem the growth already achieved by the industry.

A source in Pencom said the commission has noticed that smaller firms are eyeing the transfer window to increase their stake. The source said the commission has urged those eyeing the window as gold mine, to be creative and harness the huge untapped opportunities provided by the numbers of un-registered workers.

The source said the smaller PFAs which are mostly those that were registered last, believed the firms that were first registered have the largest share of the market and that opening the window would help increase their share.

The person noted that PenCom would never rush into opening the window, adding that the commission must ensure that the transfer is seamless at take-off, before it will be set open.

PenCom has said it is still sorting out issues that has to do with data, adding that it is working hard to forestall the challenge of multiple registeration which can mar the system if not properly done.

No comments: