In order to meet the N5 billion Minimum Regulatory Capital Requirement stipulated by the National Pension Commission (PenCom), some Pension Fund Administrators’ (PFAs) embarked on mergers and acquisitions.
This became necessary due to the increasing need of the PFAs to ramp up their capacities to manage the rising number of registered contributors and the value of pension fund assets under management and custody, which have grown
exponentially by 244 per cent, from N3 trillion in 2012, when the previous recapitalisation was done, to N12.29 trillion as of December 31, 2020.
Announcing the compliance status of the PFAs in Abuja over the weekend, PenCom said: “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.”
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Explaining further, the PenCom noted that “It is worthwhile to state that 10 PFAs had met the new regulatory capital
requirement of N5 billion as of December 31, 2021, while the others intensified efforts to meet the deadline of 27 April 2022. This Pension Fund Administrators’ (PFAs) in some mergers and acquisitions, which led to the reduction of the number of PFAs from 22 to 20.”
The PenCom, while informing all stakeholders and the general public that as of “April 27, 2022, all PFAs have complied with the Commission’s directive for the increase of the Minimum Regulatory Capital (Shareholders’ Fund) from N1 billion to N5 billion”, reiterated 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.
The Commission had approved the recapitalisation exercise for the PFAs with a 12-month transition period from 27 April 2021 to 27 April 2022.
According to PenCom, the exercise became expedient as the value of pension fund assets under management and custody had grown exponentially.
The PenCom reasoned that the sustained growth in assets implies greater fiduciary responsibilities that require more operational capacity by the PFAs, and 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.
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Recapitalisation: PFAs acquire, merge to meet N5bn capital base
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Recapitalisation: PFAs acquire, merge to meet N5bn capital base
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