New Telegraph

November 29, 2023

CPS: Private sector employers remit N101.71bn to PFAs

Following steady and positive developments in the nation’s pension industry under the Contributory Pension Scheme (CPS), employers in the private sector have continued to record impressive contribution as they remitted a total of N101.71 billion to Retirees Savings Accounts in the fourth quarter of 2021. According to the National Pension Commission (PenCom), a total pension contribution of N208 billion was remitted to individual RSAs during the period. Report on the Commission’s website shows that out of this total, the public sector accounted for N107.78 billion or 51.82 per cent, while the private sector contributed N101.71 billion balance, representing 48.12 per cent.

It also put the total value of the assets at N13.42 trillion as of December 31, 2021, adding that the cumulative pension contributions from inception to the end of the fourth quarter of 2021 amounted to N7.58 trillion, representing an increase from N7.37 trillion as at the end of Q3 2021. The N13.42 trillion comprised of N9.47 trillion in RSA’ Active’ Funds (i.e. RSA Funds I, II III and V); N1.07 trillion in RSA Retiree Fund IV; N1.52 trillion in CPFAs; N1.35 trillion in Approved Existing Schemes (AES) Funds and N16.13 billion for RSA Fund VI (Non-Interest Fund), Active and Retiree.

To ensure safety of the funds and good return on investment, the assets are mainly invested in capital market instruments with Federal Government securities taking the lead as it atteacts 65.35 per cent of total investments. According to the investment details, investments FGN Bonds takes 94.90 per cent; Treasury Bills, 2.91 per cent; while Agency, Sukuk and Green Bonds accounted for about 2.19 per cent. Meanwhile, after evaluation of their application, National Pension Commission (Pencom) has approved acquisition of AIICO Pension Managers Limited by FCMB Pensions Limited. It also approved merger between Tangerine Pensions Limited and APT Pension Funds Managers Limited and subsequent change of name of the merged entity to Tangerine APT Pensions Limited. The Commission disclosed the development on its official Twitter handle monitored by New Telegraph on Wednesday in Abuja.

Talks for meger and acquisitions among Pension Fund Administrators (PFAs) advanced last year. No fewer than four Pension Fund Administrators got into merger and acquisition ahead of the April 2022 deadline stipulated for pension companies to raise their minimum capital from N1 billion to N5 billion. The National Pension Commission had in 2020 circular in directed PFAs to raise their shareholders’ fund, giving them a 12-month transition period. The Commission argued then that its oversight function had shown that the required minimum capital was no longer adequate to meet the operational expenses of the PFA business.

Earlier, the Commission had raised the minimum capital of the PFAs from N150 million in 2011 to N1 billion in 2012. The new capital base of N5 billion has led many PFAs to consider merger and acquisition as the April 2022 deadline approaches. Last year, PenCom confirmed about 10 Pension Fund Administrators (PFAs) had met or exceeded the minimum capital base of N5 billion specified by the Commission. Ehimeme Ohioma, Head, Surveillance, PenCom, had, in an interview last year, confirmed the development. He spoke on the sidelines of the 2021 media parley organised by the Pension Fund Operators Association of Nigeria (PenOp) with the theme: “Micro Pension – Challenges and Opportunities.”

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