PenCom Applauds PFAs On N5bn Minimum Capital Requirement
BY COBHAM NSA – The National Pension Commission (PenCom) says Pension Fund Administrators’ (PFAs) compliance with its directive to increase the Minimum Regulatory Capital (Shareholders’ Fund) from one billion to N5 billion has effectively repositioned the nation’s pension industry for effective service delivery to Nigerians.
The Commission, in announcing the cheering news to stakeholders and the general public, commended all the PFAs for meeting the 27 April 2022 deadline, noting that the conclusion of the recapitalisation exercise should put smiles on the faces of stakeholders, particularly Retirement Savings Account (RSA) holders.
According to the PenCom management, RSA holders are now in a position to expect increased effectiveness and efficiency as well as improved service delivery from PFAs given the current position of things in the sector.
In a statement dated Friday, 29 April 2022, the Commission said “The sustained growth in assets implies greater fiduciary responsibilities that require more operational capacity by the PFAs.
“The urgent need to ramp up PFAs’ capacity to manage the increasing number of registered contributors and the value of pension fund assets under management led to the recapitalisation exercise.”
Furthermore, the statement, which reviewed the recapitalisation process, said; “It is worthwhile to state that 10 PFAs had met the new regulatory capital requirement of N5 billion as at 31 December 2021, while the others intensified efforts to meet the deadline of 27 April 2022. This resulted in some mergers and acquisitions, which led to the reduction of the number of PFAs from 22 to 20.”
Consequently, “The Commission approved the acquisition of AIICO Pension Managers Limited by FCMB Pensions Limited; the merger between Tangerine Pensions Limited and APT Pension Funds Managers Limited and the 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.”
Arising from the massive growth in the pension fund assets, PenCom had approved the recapitalisation exercise for the PFAs with a 12-month transition period from 27 April 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 percent, from N3 trillion in 2012 (when the previous recapitalisation was done) to N12.29 trillion (as of December 31, 2020)”, the management said in its published statement.
