The reforms embarked upon by the National Pension Commission (PenCom), have started yielding fruits with 20 Pension Fund Administrators meeting the new statutory requirement of N5billion each for their operation in Nigeria.
The commission said the development means that N100billion is now available for operational effectiveness and efficiency of the sector.
A departure from the initial N22billion the operators were working with prior to the announcement of the new capital regime on April 2021.
While issuing the directive last year, the commission had said that the new capital would allow the operators to have more funds for expansion and operational efficiency given the huge pension assets under management which currently stands at over N13trillion.
The statement reads:“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 billion 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 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.
“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 2 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 added that it had 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.
It further approved Norrenberger’s acquisition of IEI-Anchor Pension Managers Limited, after its acquisition of the majority shareholder, IEI Plc.
The agency said following the conclusion of the recapitalisation exercise, stakeholders, particularly retirement savings accounts (RSA) holders, should expect increased effectiveness and efficiency as well as improved service delivery from PFAs.
Meanwhile,the Conference of Civil Society of Nigeria, has commended the Director General of the National Pension Commission (PenCom), Aisha Dahiru Umar, over the full compliance of Pension Fund Administrators (PFAs) with the N5 billion minimum regulatory capital requirement set by the agency.
The chairman of the group,Comrade Adams Otakwu, told newsmen on Saturday that the development was laudable and in the best interest of national development.
He said: “The growth of the pension industry in Nigeria owes a great deal to the dedication, vision and profound personal commitment of the likes of the current Director General of PenCom, Hajia Aisha Dahiru Umar.In the last three years or so, we have seen very remarkable rise in pension assets alongside other tangible reforms in the industry including the current compliance of PFAs with the minimum regulatory capital requirement of N5 billion, which affords PFAs reasonable capacities for greater efficiency.”
“The DG over the period has demonstrated uncommon verve in the management of a sensitive commission like PenCom that has significant impact on the country’s economy and national security.”
olusola Bello
