This is following the expiration of the June 30, 2012 deadline issued by the regulatory body, the National Pension Commission (PenCom) for their recapitalisation to a minimum of N1 billion shareholders’ fund unimpaired by losses. The Commission also said it would transfer the assets of the failed PFAs to other PFAs that can beat the deadline.
Already three PFAs have been acquired. They are Amana Capital Pension Limited which was acquired by Sigma Pension, Crib Pension Managers Limited was acquired by Oak Pension Limited while First Alliance Pension Limited was acquired by ARM Pension Limited.
Efforts to get the management of PenCom to comment proved abortive as it stuck to its guns not to make any pronouncement until the expiration of the deadline.
However, a source in the commission who sought anonymity confirmed there was no going back on the deadline.
It was gathered that the commission does not want to rush into announcing those that have met the deadline and those that have not, in a bid to prevent a crisis in the sector.
Commenting on the plans to transfer the assets of failed PFAs to capitalised ones, Managing Director of Stanbic IBTC Pension Managers Limited, Dr Demola Sogunle said the commission would have to follow a due process since the assets were in the custody of Pension Funds Custodians (PFCs).
“It is not at the discretion of PenCom to just distribute the assets of the failed ones. Don’t forget that the assets are with the Pension Fund Custodians not with PenCom or with the PFAs,” he said.
PenCom had in a circular about one year ago directed the PFAs to raise their capital base from N150 million to N1 billion and gave them up till June 30, 2012 to comply.
Recall that in the circular, the commission through its oversight function, noted that the minimum paid-up share capital of N150 million was no longer adequate to meet the operational expenses of the PFAs, given its intensive IT nature and an average gestation period of five years.
The minimum shareholders’ fund of N1 billion unimpaired by losses is considered adequate to absorb unforeseen losses and improve the financial condition as well as business processes of the PFAs, given the current market situation. It would also encourage healthy mergers or acquisitions and promote stability in the industry.