11 out of 22 PFAs Have Already Met N5bn Capital Requirement – PenCom

In line with the mandate by the National Pension Commission (PenCom) in April this year that Pension Fund Administrators (PFAs) in Nigeria should raise their minimum capital base from N1 billion to N5 billion, 11 out of 22 PFAs have already met the requirement.

This was disclosed recently by Head, Surveillance, PenCom, Mr Ehimeme Ohioma, at the 2021 media parley organised by the Pension Fund Operators Association of Nigeria (PenOp) with the theme: Micro Pension – Challenges and Opportunities for insurance and pension journalists in Lagos.

PenCom had in April this year directed PFAs to increase their minimum share capital base from the existing N1 billion to N5billion by April 12, 2022.

Ohioma also said the new capital phase has attracted investors into the pension industry and thereby making it highly competitive adding that for the success of the exercise before the April 2021 deadline, there will be mergers and acquisitions.

He also said that the present capital raise approved by the PenCom board in April this year is the third.

The first, according to him, was the N150 million establishing capital set in the repealed Pension Reform Act 2004, followed by the second recapitalisation to N1 billion in 2011, and now, the third from N1 billion to N5bn expected to be concluded in April 2022.

Ohioma said that the objective of the recapitalisation is to improve the financial stability and operational efficiency in the industry, noting that the directive was right, as the last recapitalisation in the industry was done in 2011.

According to him, this is the second recapitalisation done in the industry since the inception of the current Contributory Pension Scheme (CPS). It is obvious that the industry has grown, assets and contributions have increased.

“There is a need for this. They need to retain the real skilled workers. We need to attract talent. There is a need for digitalization. This will cost money too and ensure efficiency, especially with the COVID-19. There has been ongoing consolidation within the industry, so we do not expect any challenges in the industry, as regards recapitalisation.

“On or before February 2022, we expect a picture of what the industry is going to look like before the April deadline,” he said.