8 PFAs Scale Recapitalisation Hurdle
In pursuant to the National Pension Commission (PenCom) circular entitled: “Revised Minimum Share Requirement for Licensed Pension Fund Administrators (PFAs),” dated April 29, 2021 and sent to Managing Directors/Chief Executive Officers of all licensed pension fund operators mandating Pension Fund Administrators to raise their Minimum Share Capital from N1 billion to N5 billion, eight out of the 22 PFAs in Nigeria have complied.
The increase, according to PenCom “is necessitated by the need to improve the capacity of PFAs, in terms of operational efficiency and effectiveness as well as service delivery.”
Speaking at a virtual event tagged: ‘Beyond Capital – A Recapitalisation Strategy Workshop for Pension Operators’ the Chief Executive Officer, Pension Fund Operators Association of Nigeria (PenOp),Mr. Oguche Agudah, disclosed that eight out of 22 Pension Fund Operators have recapitalized to the N5 billion threshold.
He noted that the operators have been working assiduously to comply with the recapitalisation mandate issued by PenCom in April this year even as he also expressed optimism that other operators would meet the mandate before the expiration of the deadline issued by PenCom.
He posited that the recapitalisation would help strengthen the industry’s operators, adding that PenOp’s corporate strategy would have been met when the PFAs achieve their set target.
The Head, Fund and Investment Management Rating, Augusto & Co., Wonuola Kunle-Bello, applauded the growth recorded over the years in the pension sector, especially last year which was impacted by COVID-19.
She stated that the recapitalisation would positively impact the Assets Under Management (AUM) and implored PFAs to explore all legal windows available to enable them to remain afloat post recapitalisation.
PenCom said it increased the shareholders’ fund of PFAs from N1 billion to N5 billion to boost their capacity in terms of operational efficiency and service delivery.
The pension sector regulator noted that its board also approved a 12-month transition period, effective April 27, 2021, within which PFAs are to meet the new minimum capital.
“The board of the commission at its 48th meeting on April 27, 2021 approved the increase of the minimum regulatory capital (shareholders’ fund) requirement for PFAs from the current N1billion to N5 billion, unimpaired losses,” it said.
