The National Pension Commission (PenCom) has affirmed full compliance to recapitalization up to a minimum of N5 billion by all the Pension Funds Administrators (PFAs) operating in Nigeria.
PenCom had approved the increase of the Minimum Regulatory Capital (Shareholders’ Fund) from N1 billion to N5 billion and given a time frame for recapitalisation exercise to the PFAs, a 12-month transition period from 27 April 2021 to 27 April 2022 within which to shore up their capital.
A statement by the Commission’s management noted that while 10 PFAs effected the recapitalization as at December 31, 2021, the 10 others achieved the exercise ahead of the April 27, 2022 deadline.
On the rationale for recapitalization exercise, PenCom stated: “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 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.
Saying that the recapitalization resulted in some mergers and acquisitions, which led to the reduction of the number of PFAs from 22 to 20, it cited that 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 its subsequent change of
name of the merged entity to Tangerine APT Pensions Limited.
It further said that the Commission also approved Norrenberger’s acquisition of IEI-Anchor Pension managers Limited, after its acquisition of the majority shareholder, IEI Plc.
PenCom assured that with the conclusion of the recapitalisation exercise, stakeholders, particularly Retirement Savings Account (RSA) holders, should expect increased effectiveness and efficiency as well as
improved service delivery from PFAs.
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