PFAs’ shareholder funds reached N211.27 billion after recapitalization, according to data supplied by the National Pension Commission (PenCom), gathering shareholder money totaling N211.27 billion after their most recent recapitalization.
According to the report, Stanbic IBTC Pensions Limited lead the other 19 PFAs with a shareholder fund of N75.83 billion. Trustfund Pensions Limited comes in second with N14.51 billion, followed by GTB Pensions Managers Limited with N11.30 billion.
Following with 10.75 billion was FCMB Pensions Limited, followed by ARM Pensions with 10.41 billion, and NPF Pension Managers Limited with 8.48 billion Nigerian Naira.
Radix Pensions Limited, with N5.0 billion, NLPC, with N5.50 billion, and Tangerine APT Pensions Limited, with N5.05 billion, were at the bottom of the table.
The commission asserts that the recapitalization operation, which required PFA to boost its shareholder funds from N1 billion to N5 billion and was conducted between April 27, 2021, and April 27, 2022, led to various mergers and acquisitions in the sector.
For example, Guaranty Trust Holding Company Plc purchased a 100% stake in Investment One Pension Managers Limited, resulting in the PFA’s name being changed to Guaranty Trust Pension Managers Limited, while FCMB Pensions Limited added a 36.3 percent share purchase to its initial 60% equity stake in AIICO Pension Managers.
To increase its stake in IEI-Anchor Pension Managers Limited, MBO Capital Management Limited purchased 80% of Radix Pension Fund Managers Limited’s shares, while Norreenberger Advisory Partners Limited purchased 80% of International Energy Insurance (IEI) Plc’s shares.
APT Pension Managers Limited and Tangerine Pensions Limited also combined to form Tangerine APT Pensions Limited.
Director General of PenCom Aisha Dahir-Umar said that all PFAs have followed the commission’s order to raise the minimum regulatory capital (shareholder fund) from N1 billion to N5 billion.
According to her, the recapitalization was done to increase the PFAs’ ability to handle the rising number of registered contributors and the asset value of pension funds.
She claims that it is anticipated that the exercise will lead to improved service delivery in the sector as well as increased effectiveness and efficiency.
The contributory pension program has 9,730.778 registered contributors as of the end of July 2022, and its pension assets had grown to N14.36 trillion.
Oluremi Oyindasola Oni, chairman of PenCom, stated that the increase in the minimum regulatory capital is anticipated to improve service delivery to members generally, boost the capability of the PFAs, and increase their presence nationwide by establishing more business outlets.
According to his annual report on the commission’s operations, the pension industry had a total of 9.59 million members in schemes and N13.42 trillion in pension assets under management as of December 31, 2021, despite the immense economic uncertainty caused by the Covid-19 pandemic and the difficult macroeconomic environment.
He said that the pension industry would continue to provide value and benefits to stakeholders and the country’s economy in the years to come given its commendable performance in key growth indicators.
According to him, the commission continued to pursue increased portfolio diversification of pension funds during the 2021 fiscal year by stepping up efforts to ensure sustained pension fund investments in structured infrastructure projects that adhere to the strict criteria outlined in the Regulation for the Investment of Pension Fund Assets.
We are happy to report that pension funds invested directly N118.31 billion in the Sukuk Bond issued by the Federal Government to support nationwide road projects, out of the N8.77 trillion, or 65.35 percent of the total pension assets under administration, Oni added.
He claimed that although N14.30 billion was placed in agency bonds issued by the Nigeria Mortgage Refinance Company, N59.32 billion was spent in FGN Green Bonds.
Oni noted that efforts are still being made to make sure that the annualized average rates of return of pension funds across RSA and Legacy Funds are higher than headline inflation rates. “Although the commission’s efforts at diversifying investments of pension funds and hedging against inflation have gradually begun to yield results, it is, however, worthy of note that these efforts are ongoing,” Oni said.