Why 22 PFAs Will Meet Recapitalisation Deadline-operators

Motolani Oseni

As recapitalisation deadline given to all the 22 Pension Fund Administrators (PFAs) by the National Pension Commission (PenCom) comes up on April 2022, pension operators are optimistic that they will all scale through the process.

Speaking on this development on Friday, the president, Pension Fund Operators Association of Nigeria (PenOp), Mr Wale Odutola, said, though, the regulator gave operators one year to recapitalise, he sees no reason to push for an extension as most PFAs have either recapitlised from the previous N1 billion to the new minimum capital benchmark of N5 billion or were at an advanced stage of recapitalisation process.

Odutola, who is also the managing director/CEO of ARM Pension, noted that, the exercise will further create a strong pension industry, makes the balance sheet of PFAs robust and ensure that operators provide quality and superior customer service delivery.

Stating that, some of his colleagues have adopted mergers and acquisitions to recapitalise, he added, some have equally approached their existing shareholders to increase their stake in their respective PFAs.

By April 2022, he expects all the Pension Fund Administrators to have met the new capital threshold that will equally be a blessing to the new pension scheme.

Stating that, though about 50 per cent of PFAs have upgraded capital to the new threshold of N5billion, Odutola assured that the remaining PFAs would have concluded their recapitalisation exercise, latest by February 2022, believing that, all the PFAs will scale through as they are all at an advanced stage of their recapitalisation exercise in the industry.
Speaking earlier at a media parley in Lagos, the head, Surveillance, PenCom, Mr Ehimeme Ohioma, disclosed that about 10 or 11 PFAs have increased minimum capital base to N5 billion.
To her, the objective of the recapitalisation exercise was to improve the financial stability and operational efficiency in the industry.
According to her, “this is the second recapitalisation exercise in the industry within the current CPS. It is the because the industry has grown and the assets has grown, hence, there is need for this.

“They (PFAs) need to retain the real skilled workers. We need to attract talent. There is need for digitalisation. This will cost money too and ensure efficiency especially with the Covid-19. So, the exercise is ripe and we are looking at having big players in the industry,” she stressed.
It had been reported that, no fewer than 11 Pension Fund Administrators (PFAs) have upgraded their shareholders’ fund from N1billion to N5 billion.
The National Pension Commission (PenCom) had earlier mandated all the 22 Pension fund administrators in the country to raise additional N4 billion capital on the existing minimum capital of N1billion, such that, by April 2022, each of them has a minimum shareholders fund of N5billion.

Findings show that, Stanbic IBTC Pension Managers, ARM Pension Managers Limited, NPF Pension Limited, First Guarantee Pension Limited, Leadway Pensure Limited, Premium Pension Limited, among others, have so far recapitalise to the new threshold.

Similarly, four Pension Fund Administrators may go into merger and acquisition ahead of the April 2022 deadline stipulated for pension companies to raise their minimum capital from N1bn to N5billion.

Findings show that PenCom had granted a “no objection” approval to Guaranty Trust Holding Company to acquire 100 per cent shareholding of Investment One Pension Managers Limited.

Similarly, the commission was said to have also granted a “no objection” approval to FCMB Pensions Limited for the next phase of acquiring 60 per cent shareholding of AIICO Pension Managers Limited.
Meanwhile, AXA Mansard Pensions Limited has re-branded and changed its name to Tangerine Pensions Limited, following the completion of the acquisition of 100 per cent shareholding of AXA Mansard Pensions Limited by Verod Capital Management Limited.