Transparency concerns trail PFAs as contributors seek stronger oversight

Concerns are mounting within Nigeria’s contributory pension industry over what stakeholders describe as uneven disclosure practices by some Pension Fund Administrators (PFAs), raising questions about consumer protection, market transparency and regulatory enforcement.

Industry analysts and Retirement Savings Account (RSA) holders say many PFAs do not consistently publish their annual financial statements, update fund prices or provide detailed portfolio disclosures on their websites — limiting contributors’ ability to make informed decisions, particularly under the pension transfer window.

An industry observer familiar with sector operations told The Nation that access to timely and comprehensive information remains inconsistent across operators.

“Some PFAs do not publish their annual accounts or update their fund performance data regularly. Without this information, contributors cannot properly assess performance or compare administrators before switching,” the analyst said.

Under the Contributory Pension Scheme, RSA holders are permitted to move their accounts from one PFA to another after a stipulated period. However, contributors argue that the effectiveness of the transfer window depends largely on transparent, comparable data on performance, fees and investment allocation.

Many RSA holders who spoke to The Nation expressed frustration over what they described as irregular or incomplete communication from their PFAs.

One contributor said she had not received a detailed monthly statement in months.

“I get occasional SMS alerts showing contributions credited, but I don’t receive comprehensive monthly statements with proper breakdown of returns and investment allocation. It’s difficult to track performance or ask informed questions,” she said.

Another contributor noted that while switching PFAs is theoretically possible, limited public disclosure makes objective comparison challenging.

“If pricing and portfolio information are not clearly available or regularly updated, how do contributors make informed decisions? The system works best when there is transparency,” he said.

Nigeria’s pension industry, regulated by the National Pension Commission (PenCom), manages retirement savings assets running into trillions of naira, placing fiduciary responsibility and governance standards at the centre of public trust.

Financial governance experts say that given the scale of assets under management, PFAs should maintain disclosure standards comparable to publicly listed companies.

“Pension fund administrators manage long-term savings of millions of Nigerians. Information asymmetry weakens market discipline. In a system where contributors bear investment risks, access to timely and detailed data is fundamental,” a governance analyst said.

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Stakeholders also point to limited media engagement within the industry. While a handful of PFAs periodically brief journalists on performance and strategy, many operators rarely provide structured public updates on their activities, leaving industry observers with limited insight into operational developments.

Beyond disclosure practices, some observers have raised concerns about regulatory enforcement visibility.

PenCom has in the past sanctioned PFAs over unresolved customer complaints, failure to issue monthly statements, delayed remittances and other compliance breaches. Such actions were periodically published as part of efforts to strengthen discipline within the industry.

However, industry sources say sanctions and publicised enforcement actions appear to have reduced in recent times, prompting calls for renewed regulatory assertiveness.

“Previously, sanctions were more visible. Recently, there seems to be less publicised disciplinary action. Strong oversight reassures contributors that the system is being actively monitored,” a pension industry source said.

Analysts argue that consistent enforcement of disclosure requirements — including mandatory publication of annual financial statements, fund performance data and customer communication standards — would strengthen confidence in the Contributory Pension Scheme.

They also note that transparency is essential not only for contributors considering transfers but also for those evaluating retirement options, including programmed withdrawal or annuity arrangements offered by insurance companies.

When contacted, officials of the National Pension Commission said the regulator remains committed to protecting contributors’ interests and ensuring compliance with operational guidelines. Further responses to specific questions on disclosure requirements and recent sanctions were awaited at press time.

As pension assets continue to grow and the industry deepens its footprint in Nigeria’s financial markets, stakeholders say sustained transparency and visible enforcement will remain critical to maintaining public confidence in the long-term savings system.