Main Reason PFAs Recapitalize From N1bn To N5bn – DG, PenCom

By LOVETH AZODO, Lagos

To clear the assumptions of pension contributors, the Director General, National Pension Commission, Aisha Dahir-Umar has revealed why the commission mandated the Pension Fund Administrators (PFAs) to increase the Minimum Regulatory Capital (Shareholders’ Fund) requirements from N1billion to N5billion.

The reason for the recapitalization exercise was to ramp up the capacity of the Pension Fund Administrators to manage the increasing number of registered contributors, and the value of pension fund assets.

Umar who was represented by Head, Corporate Communications Department, PenCom, Dauda Ahmed made the revelation during her keynote address Today at the 2022 Journalist Workshop with theme “Increasing Informal Sector Participation In The Contributory Pension Scheme (CPS): The Case For Micro Pension Plan.” held in Lagos.

The recapitalization exercise had a 12-month transition from April 27 2021, to April 27 2022.

According to her, As of the deadline, all Pension Fund Administrators (PFAs) have complied with the Commission’s directive to increase the Minimum Regulatory Capital (Shareholders’ Fund).”

She added that the number of registered contributors stood at 9,795,957million while the value of pension fund assets stood at N14.27 Trillion, as at June 30, 2022.

In her optimism, she said it is expected that the exercise will bring about increased effectiveness and efficiency as well as improved service delivery in the industry.

She re-affirm the Commission’s commitment to creating awareness and holding social dialogue on the workings of the Contributory Pension Scheme with relevant stakeholders towards the smooth implementation of the Contributory Pension Scheme in Nigeria. 

On Micro Pension, she added that Strategic efforts to drive the Micro Pension Plan (MPP) remain one of the significant areas of focus of the Commission.

“The MPP was conceptualized to expand pension coverage to the informal sector, including small-scale businesses, entertainers, professionals, petty traders, artisans, and entrepreneurs.”

“The MPP was implemented to curb old-age poverty by assisting the workers, as mentioned above, to contribute while working and build long-term savings to fall back on when they become old.”

She reiterated that the commission in collaboration with the Pension Fund Operators Association of Nigeria, is currently championing an Industry Media Campaign in major cities in the country’s six geopolitical zones to create awareness of the Micro Pension Plan, the Commission.

On the theme of the workshop she said that the theme is apt because it aligns with the Commission’s objective of expanding coverage of the CPS.

“The objective is to bring in to the CPS, Nigerians working in the Informal Sector and those who are Self Employed through the Micro Pension Plan (MPP),” she said.