The National Pension Commission (PenCom) has announced that that as at 27 April 2022, 20 Pension Fund Administrators (PFAs) have complied with the Commission’s directive for the increase of their minimum Capital from N1 billion to N5 billion.
According to the regulatory body of the industry, 10 PFAs had met the new regulatory capital requirement of N5 billion as at 31 December 2021, while the 10 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.
The Commission noted that 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.
Recall that the Commission 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 from N3 trillion in 2012 (when the previous recapitalisation was done) to N12.29 trillion (as at December 31, 2020).
The sustained growth in assets implies greater 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 value of pension fund assets under management led to the recapitalisation exercise.
The Commission 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.