Status of N5 billion New Minimum Capital Requirement for PFAs in the Pension Industry
The National Pension Commission (PenCom) had earlier last year released a circular to Pension Fund Administrators (PFAs) that the Minimum Regulatory Capital (Shareholders’ Fund) for PFAs have been increased from N1 billion to N5 billion, but the PFAs were given a grace period of 12 months which will end in April 2022.
PenCom had noted that the upward review of the minimum regulatory capital for PFAs was necessary because the value of pension assets under management and custody had grown exponentially and its oversight function had shown that the old minimum capital was no longer adequate to meet the operational expenses of running a Pension Fund Administrator.
The new minimum regulatory capital requirement has led many PFAs to approach their shareholders for more funds, consider merging with or acquiring other PFAs, to ensure they meet the April 2022 deadline.
Speaking at a media parley in Lagos late last year, the head of surveillance of PenCom, Ehimeme Ohioma, disclosed that about 11 PFAs had already met the minimum capital base of N5 billion. We also expect the National Pension Commission (PenCom) to soon officially announce the names of the companies that have recapitalized so far.
Specifically, there are reports that Stanbic IBTC Pension Managers Limited, ARM Pension Managers Limited, Nigeria Police Force Pension Limited, First Guarantee Pension Limited, Leadway Pensure Limited, Premium Pension Limited have already met the minimum capital base of N5 billion. It is most certain that these PFAs got the additional capital requirements from their shareholders.
The following PFAs have also met the new minimum capital requirements through merger and acquisitions:
Investment One Pension Managers Limited
The National Pension Commission (PenCom) has granted a “no objection” approval to Guaranty Trust Holding Company to acquire 100% shareholding of Investment One Pension Managers Limited.
FCMB and AIICO Pension Managers Limited
PenCom has also granted a “no objection” approval to FCMB Pensions Limited to acquire 60% shareholding of AIICO Pension Managers Limited.
AXA Mansard Pensions Limited
AXA Mansard Pensions Limited has already re-branded and changed its name to Tangerine Pensions Limited. This followed the completion of the acquisition of 100% shareholding of AXA Mansard Pensions Limited by Verod Capital Management Limited. Verod Capital is reportedly backed by foreign and local institutional investors.
In conclusion, it’s necessary to note that some other PFAs not mentioned above, could have met the minimum capital base of N5 billion but have not yet made this public. As a Retirement Savings Account (RSA) holder you can be rest assured that no matter what happens the balance in your RSA is secured.
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