20 PFAs meet N5 billion pension industry recapitalization requirement

The National Pension Commission (PenCom) has confirmed that 20 Pension Fund Administrators (PFAs) have complied with the Commission’s directives to raise the Minimum Regulatory Capital (Shareholders’ Fund) from N1billion to N5 billion as at the deadline of April 27, 2022.

As a result, PenCom has given the 20 successful PFAs clean bill of health to carry on business in the pension market.

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It will be recalled that the Commission had approved the recapitalization exercise for the PFAs with a twelve month transition grace period from 27 April, 2021 to April 27, 2022 to meet the new requirement.

A statement from PenCom affirming the new status in the pension industry made available to AssurPen News stated “PFAs comply with N5 billion Minimum Capital Requirement.”

“The National Pension Commission (PenCom ) is pleased to inform all stakeholders and the general public that as at 27 April 2022, all Pension Fund Administrators (PFAs) have complied with the Commission’s directive for the increase of the Minimum Regulatory Capital (Shareholders’ Fund) from N1 bi to N5 billion.

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 by 244 percent, 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 fiduciary responsibilities that requi re more operational capacity by the PFAs. need to ramp up PFAs capacity to manage the increasing The urgent number of registered contributors and value of recapitalisation exercise.

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 acquisitions, which le of 27 April 2022. This resulted in d to the reduction of the number of PFAs from 22 to 20.

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 Managers Limited Anchor Pension , after its acquisition of the majority shareholder, IEI Plc.

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

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