The National Pension Commission (PenCom) has introduced an Enhanced Contributor Registration System (ECRS) meant to solve the challenges faced with the existing Contributor Registration System (CRS).
Details obtained from the Commission showed that the new enhanced CRS was developed to address the issues identified with the CRS while integrating with the National Identity Management Commission (NIMC) and the inclusion of the Micro Pension Scheme.
The ECRS consists of six major functions: contributor registration to generate unique pin; recapture for existing contributors; bio-data update; update of signature and picture, where applicable; temporary pin for employer initiated registration and Retirement Savings Account (RSA) verification service.
For contributors’ data integrity, the enhanced registration system also has the following capabilities: dashboard availability for Pension Fund Administrators (PFAs) to view status of their requests and summary reports and PFAs can also receive notifications via Dashboard, emails and Error Codes.
The Head, Corporate Communications Department of PenCom, Peter Aghahowa, told Daily Trust that PenCom’s authorised staff can also use the ECRS to view status of submissions by PFAs, generate reports and approve requests that require authorisation.
In addition to download responses, latest upgrades, patches, employer codes generation, the system also has capacity for National ID verification with NIMC. The system went live on June 24, 2019, after PenCom assessed the environmental readiness of PFAs and pilot run for the PFAs to use ECRS.
This new development is significant for the pension industry as it may pave the way for the implementation of other critical policies hitherto prevented by poor contributors’ data. One of such policies is the transfer window provided in the Pension Reform Act, 2014 (PRA, 2014), allowing RSA holders to switch PFAs if they so desire.
One of the biggest challenges confronting Nigeria’s pension industry is cleaning up existing data of contributors and pensioners under the Contributory Pension Scheme (CPS).
Under the CPS, a comprehensive and reliable data of RSA holders remains a huge challenge, a development some sources said has been the reason the PenCom has been reluctant in opening up the transfer window.
The PRA, 2014 provides that an employee may, not more than once in a year, transfer his or her RSA from one PFA to another without producing any reason for such transfer.
Section 13 of the Pension Reform Act 2014 also provides that, “subject to guidelines issued by the commission, a holder of a retirement savings account maintained under this Act may not, more than once in a year, transfer his account from one Pension Fund Administrator to another.”
Despite this provision, PenCom is yet to authorise PFAs to allow RSA holders to transfer their RSAs from one PFA to another. The implication is that RSA holders, whose PFAs are underperforming in terms of return on investments, are stuck with such PFAs as they cannot move their contributions to PFAs with better history of high returns on investment.
Daily Trust’s sources within PenCom said poor contributors’ data integrity has been a major hindrance to the commencement of the transfer window.
There are concerns among pension managers and operators that until existing data of contributors are properly refined and deemed reliable, there will be cases of identity theft and large-scale frauds. It appears that the introduction of the ECRS is one of the innovations of the Commission to clean up the database of RSA holders to ensure that issues such as duplications and misinformation are fixed.
Recall that as part of efforts to improve the integrity of contributors’ data, PenCom recently directed all RSA holders to provide their National Identity Number to their fund managers. In a new circular to Pension Fund Administrators, PenCom said the new development involved both active and retired RSA holders.
The directive conformed with the policy of the federal government of Nigeria that has made it mandatory that all Nigerians must have a National Identity Number. By law, the NIMC has the mandate to implement the National identity system in Nigeria and the harmonisation by all data gathering agencies may be part of federal government’s strategy to have a clean National Identity System.
PenCom advised RSA holders to approach their PFAs to provide their Bank Verification Numbers (BVNs), NIN as well as other needed biodata.
These latest innovations, ECRS and integration of BVN and NIN with RSAs, may be a golden opportunity for PFAs to clean up their databases to combat identity theft as well as fight fraud in the pension industry. A clean database in the industry will also pave the way for the introduction of the transfer window that will enable RSA holders to switch accounts from one PFA to another to get better services.
Daily Trust also gathered that PFAs have started using ECRS and updating the biodata of RSA holders to have a clean database that can help in the fight against identity theft that is gradually becoming a problem even in the pension industry.