Recapitalisation: PFAs go for merger, acquisition to beat deadline
Daily Courier– The National Pension Commission (PenCom), has revealed that some Pension Fund Administrators (PFAs) resorted to mergers and acquisitions arrangement to beat the April 27, 2022 deadline, for the operators to recapitalise.
The apex pension regulator 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, 10 PFAs have met the new regulatory capital requirement of N5 billion as at 31 December, 2021, while the others intensified efforts to meet the deadline of 27 April, 2022.
This resulted in some mergers and acquisitions, which led to the reduction of the number of PFAs from 22 to 20, PenCom said.
The Commission explained that the exercise became expedient, as the value of pension fund assets under management and custody had grown exponentially by 244% from N3 trillion in 2012 (when the previous recapitalisation was done), to N12.29 trillion (as at December 31, 2020).
In a statement posted on its website, NAICOM said the sustained growth in assets implies greater fiduciary responsibilities that require more operational capacity by the PFAs.
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.
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.
The apex pension regulator had revealed that the PFAs have complied with the Commission’s directive for the increase of the Minimum Regulatory Capital (Shareholders’ Fund) from N1 billion to N5 billion.
Analysts believe that with the conclusion of the recapitalisation exercise, stakeholders, particularly Retirement Savings Accounts (RSA) holders, should expect increased effectiveness and efficiency as well as improved service delivery from the Pension Fund Administrators.