At Last, PFAs Scale Recapitalisation Hurdle, Raise Capital Base To N5bn

The National Pension Commission (PenCom), yesterday said all Pension Fund Administrators (PFAs) have complied with the commission’s directive to increase their Minimum Regulatory Capital (Shareholders’ Fund) from N1 billion to N5 billion as at April 27, 2022.

The commission thereby assured stakeholders particularly the Retirement Savings Accounts (RSA) holders that with the conclusion of the recapitalisation exercise, they should expect increased effectiveness, efficiency as well as improved service delivery from PFAs.

The announcement by PenCom appeared to have put paid to the consolidation exercise which began in the past year.

The apex pension regulatory agency had approved the recapitalisation exercise of the PFAs with a 12-month transition period from April 27, 2021 to 27 April 2022.

The exercise became expedient as the value of pension fund assets under management and custody had grown exponentially by 244 per cent, from N3 trillion in 2012, when the previous recapitalisation was carried out to N12.29 trillion as December 31, 2020.

PenCom, in a statement, further explained that the sustained growth in assets implied greater fiduciary responsibilities that required more operational capacity by the pension operators.

It pointed out that the urgent need to ramp up PFAs capacity to manage the increasing number of registered contributors and value of pension fund assets under management had led to the recapitalisation exercise.

The commission noted that 10 PFAs had met the new regulatory capital requirement of N5 billion as at December 31, 2021, while the others intensified efforts to meet the deadline of April 27, 2022.

The jostle among the PFAs to meet the deadline had necessitated some to embrace mergers and acquisitions, which led to the reduction of the number of PFAs from 22 to 20 currently.

The commission had in the process approved the acquisition of AIICO Pension Managers Limited by FCMB Pensions Limited; and the merger between Tangerine Pensions Limited and APT Pension Funds Managers Limited and subsequent change of

name of the merged entity to Tangerine APT Pensions Limited.

In addition, the commission also approved Norrenberger’s acquisition of IEI-Anchor Pension Managers Limited, after its acquisition of the majority shareholder, IEI Plc.

The commission, therefore, expressed satisfaction that all the PFAs had now successfully scaled the recapitalisation hurdle.

“With the conclusion of the recapitalisation exercise, stakeholders, particularly RSA holders, should expect increased effectiveness and efficiency as well as improved service delivery from PFAs,” the statement added.