Having a pension fund is one of the best decision anyone can take. In the public service field, employees are mandated to have pension funds set aside for the period of retirement. However, it is one thing to have a pension fund, it is another thing to have a very credible pension fund administrator. This is why this post will guide you through to ensure you know how to choose pension fund administrator without any issue.
What should you look out for in a Pension Fund administrator (PFA)? Should I choose just any PFA you see and like? What are the questions you need to ask before choosing? What are the factors you need to put into consideration? These and many more will be outlined for you here as you stay put and follow our guide here.
But before then…
Who Is A Pension Fund Administrator?
According to Nigeria’s National Pension Commission, A Pension Fund Administrator (PFA) is a company licensed by the National Pension Commission to manage and invest the pension funds in the employee’s Retirement Savings Account (RSA). From this, we can see that a pension administrator is not necessarily a person/individual. Rather, it is a duly recognised company, licensed by the commission.
Furthermore, you can see that they not only manage the pension fund, they also invest them. This will be helpful in choosing your PFA.
How To Choose Pension Fund Administrator In Nigeria
Having seen who a PFA is, let’s see how to choose one. So, let’s see things you should look out for while choosing your PFA.
1. Check out Investment Opportunities
Since the main responsibilities of the PFA is to manage and invest pension funds, it is very important to evaluate the list of available investments the PFA offers. You should be able to go through their investment options and ensure you adopt one that suits your preferences and choices.
Do not bother to choose any PFA without transparency. Lots of PFA out there are only profit-driven even to the detriment of the customers. They understand that most people do not understand how pension funds work, so, they utilise that to keep a lot of things secret. If the PFA you are trying to choose are not clear on certain issues such as charges, fees and investments, it is advised you exercse caution.
3. Evaluate the management Team
You are advised to carefully choose a PFA with an excellent management team, an impressive investment team, experienced pension fund managers with impeccable performance records, and perhaps a parent company with an outstanding history of investment returns and performance in asset management.
4. Online Access
We are in the era of technology. This should also influence your decision. It is vital you choose a PFA that allows you the convenience of checking your account even from the comfort of your home without problems. The PFA should also give you access to them even through the online services like emails and online chat. This unique customer service will ensure your challenges are handled speedily if they arise.
5. Fees & Charges
You should compare the contract charges of providers. Your pension provider will deduct charges directly from the pension fund rather than billing you directly. This will either be a percentage charge (possibly with a discount for a large fund value) or monetary amount. Furthermore, ensure that every possible fees and charges are spelt out before you sign an agreement with them.
Choosing a PFA is often tasking, but with the right information, it makes the process easier. We have shown you some of the things you should consider when thinking of how to Choose Pension Fund Administrator.
Any question? Use the comment box below.