Three Pension Fund Administrators, which are not likely to meet the Saturday recapitalisation deadline set by the National Pension Commission, have been acquired by bigger players in the industry.
According to PenCom, Amana Capital Pension Limited has been acquired by Sigma Pension Limited; First Alliance Pension has been acquired by ARM Pension Managers Limited; while Crib Pension Fund Managers Limited has been acquired by OAK Pensions Limited.
In order to meet the new capital requirement of N1bn, many of the PFAs have been raising money through right issues and capitalisation of their existing reserves. In June 2011, PenCom had ordered the PFAs to raise their minimum capital from N150m to N1bn if they must remain in business.
The Director-General, PenCom, Mr. Mohammad Ahmad, said the previous minimum paid up capital of N150m was no longer adequate to meet the operational needs of the pension fund administration business, given its intense infrastructural nature and long development period. He said that the PFAs had the option to raise their capital, merge or get acquired by others.
“However, as a last option, the commission may exit the PFA by transferring the management of its pension assets to another, usually the one with the highest return on investment, and then, the licence is withdrawn,” Ahmad said. The PenCom boss, however, gave an assurance that such regulatory action would not affect the safety of pension assets, adding that it would promote stability in the industry.
Ahmad said it was expected that the improved financial conditions of the PFAs after raising their capital requirements would lead to improved service delivery, product development, improved capacity building, employment of qualified personnel and development of adequate IT infrastructure for improved business process. He added that the new capital base would become effective from June 30, and would subsequently be monitored by the commission on an annual basis at the end of the financial year of each PFA.
“In the event of winding down of business, the PFA will be directed to simply transfer all the pension assets under its management to another licensed PFA,” he said. Meanwhile, Leadway Pensure PFA Limited has said that it has met the new capital base requirement.
“We at Leadway Pensure PFA Limited are pleased to inform you that we have successfully met the new minimum share capital requirement as at December 31, 2011. Our share capital now stands at N1.23bn,” the company said in a statement.
The Managing Director, AIICO Pension Managers Limited, Mr. Eguarekhide Longe, has also said that the company has met all the recapitalisation requirements. “We want our customers to know that AIICO PFA is here for the long run, all our clients should know that we are here for them,” he said.