There are palpable fears among pension fund administrators over impending loss of patronage.
This is occasioned by plans to commence the implementation of the Retirement Savings Account (RSA) transfer window under the Contributory Pension Scheme (CPS).
The insurance apex regulatory body, National Pensions Commission (PenCom), recently disclosed plans to activate the statutorily approved transfer window available to contributors under the CPS.
In the just concluded week, the National Pensions Commission (PenCom) announced its plans to commence the implementation of the Retirement Savings Account (RSA) transfer window under the Contributory Pension Scheme (CPS) on Monday, November 16, 2020. Hence, pensioners who have not had opportunity to change their Pension Fund Administrators (PFAs) as a result of lower returns on investment management or poor customer service delivery, now have the platform to move their RSA to other competing firms in the pension industry. However, the movement of the RSA can only be done once in a year. According to PenCom, the electronic migration platorm which is in line with Section 11(2) of the Pension Reform Act 2004, that an employee reserves the right to migrate from one PFA to another without adducing reasons, would further boost stakeholders confidence in the scheme. In another development, the Central Bank of Nigeria (CBN), in line with its developmental mandate on Tuesday, November 10, 2020, unveiled guidelines for the operation of Private Sector-led Accelerated Agriculture Development Scheme (P-AADs) which is meant to facilitate increased private sector agricultural production of staple foods and industrial raw materials, as well as support food security, job creation and economic diversification. According to the apex bank, the agricultural commodities eligible for consideration under the scheme include: rice, maize, cassava, cotton, wheat, tomato, poultry, fish, sorghum, oil palm, cocoa and livestock. CBN pegged the maximum loan accessible per obligor at N2 billion while the interest rate was maintained at 5% per annum till February 2021 (it would increase to 9% from March 1, 2021). Going by the guideline, maximum tenor for loan repayment for annual crops is six years (with a moratorium of six months) while perennial crops have a maximum tenor of 10 years with a moratorium of one year. Similarly, efforts at growing the local economy also received a boost from the United Nations (UN) as it supported Nigeria’s Economic Sustainability Plan with USD250million.The United Nations Plus Offer for Social-Economic Recovery fund is meant to complement the COVID-19 economic recovery efforts by FG. Specifically, USD13.78 million would be used for development of health response system; USD53.3 million to protect people; USD30.7 million for macro-economic stability and economic recovery; and USD26.6 million for social protection to assist communities bounce back better, amongst other things. At the international market, crude oil prices continued to rally amid announcement by American company (Pfizer) and its German partner (BioNTech) of their breakthrough in COVID-19 vaccine development. The two companies had claimed that their vaccine was 90% effective in preventing COVID-19 infections. Hence, the West Texas Intermediate (WTI) crude price rose w-o-w by 6.69% to USD41.12a barrel. Also, Brent price rose by6.93% to USD43.53a barrel as at Thursday, November 12, 2020; while, Bonny Light increased by 16.76% to USD43.47a barrel. Nevertheless, we saw a 0.74% w-o-w decline in US crude oil input to refineries to 13.45mb/d as at November6, 2020 (also, It declined y-o-y by 15.52% from 15.92mb/d as at November 8, 2019). Also, U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) rose by 0.88% w-o-w to 488.71million barrels as at November6, 2020 (inventories have risen by 8.84% y-o-y from 449.00million barrels as at November 8, 2019).We feel that the implementation of the RSA transfer window would spur healthy competition amongst players in the industry with pensioners largely benefitting from it. Meanwhile, we expect the fiscal authority to do more at its end and complement CBN’s efforts on the developmental front in order to achieve holistic results.