Pension Fund Administrators (PFAS) have complied with National Pension Commission (PenCom’s) directive for the increase of the Minimum Regulatory Capital (Shareholders’ Fund) from N1 billion to N5 billion.

A statement signed by PenCom management says the requirement was met as at April 27, 2022.

PenCom says the sustained growth in assets implies greater fiduciary responsibilities that require more operational capacity by the PFAs. It was the urgent need to ramp up PFAs capacity to manage the increasing number of registered contributors and value of pension fund assets under management that led to the exercise.

The Commission had approved the recapitalization exercise for the PFAs with a 12-month transition period from April 27, 2021 to April 27, 2022. The exercise became expedient as the value of pension fund assets under management and custody had grown exponentially by 244 per cent, from N3 trillion in 2012 (when the previous recapitalization was done) to N12.29 trillion (as at December 31, 2020).

It is worthwhile to state that 10 PFAS had met the new regulatory capital requirement of N5 billion as at December 31, 2021, while the others intensified efforts to meet the deadline of April 27, 2022. This resulted in some mergers and acquisitions, which led to the reduction of the number of PFAs from 22 to 20, it stated.

The Commission approved the acquisition of AllCO 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 With the conclusion of the recapitalization exercise, stakeholders, particularly RSA holders, should expect increased effectiveness and efficiency as well as improved service delivery from PFAS.