The National Pension Commission has raised the shareholders funds of Pension Fund Administrators from the current N1bn to N5bn, the first such wide margin raise.
Businesspost online gathered that only PFAs were affected. They are owned by private entrepreneurs while CPFAs are mostly owned by oil firms. The PFAs have a 12-month transition period, effective 27 April 2021, within which they are to meet the new minimum capital requirement. It is expected that by April 27 2022, all pension administrators would be compliant.
In a terse statement by PenCom captioned: “Revised Minimum Share Capital Requirement For Licensed Pension Fund Administrators (PFA),” the PFAs were informed of the board approved increase of the minimum regulatory capital (shareholders fund) and the requirement for PFAs to move from the current N1bn to N5bn “unimpaired by losses.”
PenCom said “the increase in the minimum regulatory capital is necessitated by the need to improve the capacity of PFAs, in terms of operational efficiency and effectiveness as well as service delivery.” The pension industry has experienced phenomenal development since the first pension act was rolled out in 2004 and updated a decade after as PRA 2014.
