Executives of PenOp at the event.
BY NKECHI NAECHE-ESEZOBOR–As April 2022 deadline given to Pension Fund Administrators (PFAs) to meet the new N5 billion minimum share capital regime draws closer, the National Pension Commission (PenCom), said only 10 PFAs have been able to surpass the new share capital.
Ehimeme Ohioma. Head, Surveillance Department of the commission disclosed this during a one day media parley with National Association of Insurance and Pension Correspondents (NAIPCO) held in Lagos yesterday that ten firms have already exceeded the N5billion minimum capital recapitalisation and others are currently undergoing either mergers or acquisition to meet the new capital requirement.
Explaining further on the need for recapitalisation, he said the objective of the recapitalization exercise was to improve the financial stability and operational efficiency in the industry.
He said “the last exercise was done in 2011, the share capital of Pension Fund Administrators (PFAs) at the start of Contributory Pension Scheme (CPS) was N150million and it was later increased to N1billion in 2011. This is the second increase of the share capital of PFAs within this scheme.
” It is obvious the industry has really grown. it’s Assets Under Management has increased, the number of registered contributors has also increased and this requires increase in capital that the PFAs will have to deploy into its operations.
He stated that the operators need to engage the retain skilled workers. “We are competing with the banks, fund managers and they need to attract talents and they need capital to do that.”
“Another area is the digitalization and automation of our operations. We need to do a lot of investment in ICT infrastructure and this cost money too. All these involves providing very topnotch service delivery by PFAs.”
He noted that the PFAs has actually be responsive to the ongoing consolidation within the industry.
He added that PFAs are either merging or are being acquired by bigger companies. “We are having bigger players and big opportunity for financial sector to come and play in the industry.”
Also, Managing Director/CEO Access Pension Fund Custodian and Head, Media Committee of PenOp, Mrs. Idu Okwuosa, hinted plans by the operators to work with some insurance companies in 2022 to provide more robust incentives such as health insurance for micro pension contributors.
She listed loss of job policy and term life assurance as some added incentives that the industry will looking for contributors under the micro pension plan.
She also disclosed tht the operators have visited some market such as the Alaba International market to enlighten them on the need to save and plan for retirement through the MPP.
She said they have commence discussion and hopefully next year when the incentives are concluded they will be registered fully.
