How Big will the New FCMB Pensions be?
FCMB Group Plc (FCMB Group) on the 25 June 2020 notified the Nigerian Stock Exchange (“NSE”) and the investing public that its pension management subsidiary, FCMB Pensions Limited (“FCMB Pensions”) had entered into discussions with shareholders of AIICO Pension Managers Limited (“AIICO Pensions”), to acquire the 70% stake held by AIICO Insurance Plc and 26% held by some other shareholders in AIICO Pensions.
The acquisition will give FCMB Pensions 96% stake in AIICO Pensions, this would make one wonder how big FCMB Pensions will be after the acquisition considering the fact that both Pension Fund Administrators (PFAs) are fairly popular and FCMB Pensions will gain more market share after the acquisition.
Biggest Pension Fund Administrator (PFA) by Retirement Savings Account (RSA) Assets Under Management (AUM)
As at May 2020, the total assets of Nigeria’s pensions industry stood at N10.80 trillion. N1.13 trillion of the assets were classified as existing schemes; N1.31 trillion belonged to Close Pension Fund Administrators, while Retirement Savings Accounts were worth N8.35 trillion.
We estimate that FCMB Pensions currently has around 3.04% of the N8.35 trillion Retirement Savings Accounts (RSA) assets under management (AUM) by PFAs, while AIICO Pensions has around 1.47% of the N8.35 trillion RSA AUM. The new FCMB Pensions is therefore estimated to have around 4.51% of the RSA AUM. This will make the new FCMB Pensions the 9th biggest PFA by RSA AUM (FCMB Pensions is currently 11th while AIICO Pension is currently 13th by RSA AUM). The Top 5 PFAs by RSA AUM are Stanbic, ARM, Premium, Nigeria Police Force and Trust Fund Pensions.
Biggest Pension Fund Administrator (PFA) by Retirement Savings Account (RSA) Contributors
The total RSA Contributors under the Contributory Pension Scheme as at 31 May 2020 is 9,016,324.
We estimate that FCMB Pensions currently has around 4.75% of the total 9,016,324 Retirement Savings Accounts (RSAs), while AIICO Pensions has around 2.8% of the 9,016,324 RSAs. The new FCMB Pensions is therefore estimated to have around 7.55% of the total RSAs. This will make the new FCMB Pensions the 6th biggest PFA by RSA Contributors (FCMB Pensions is currently 8th while AIICO Pension is currently 14th by RSA Contributors). The Top 5 PFAs by RSA Contributors are Stanbic, ARM, Trust Fund, Sigma and Premium Pensions.
How Big will the new FCMB Pensions be?
The new FCMB Pensions (FCMB + AIICO Pensions) wont be among the top 5 Pension Fund Administrators (PFAs) by Assets Under Management (AUM) or Retirement Savings Account (RSA) Registrations, but we estimate that it will be the;
9th Biggest PFA by RSA AUM
6th biggest PFA by RSA Contributors
The new FCMB Pensions has two options to be among the Top 5 PFAs in Nigeria, strategically acquire another PFA (easier) or “whoa” new and exiting RSA Contributors, after all, PenCom will likely open the transfer window by December 2020.
Read more about FCMB Pensions acquisition of AIICO Pension here
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