The National Pension Commission (PenCom) is looking into the proof that the country’s Pension Fund Administrators (PFAs) are meeting the country’s new capital standards ahead of the April 30, 2022 recapitalisation deadline.
Many PFAs submitted documentation of recapitalization this week, according to sources among the operators, as they stepped up efforts to overcome the regulatory obstacle.
According to industry sources who spoke, PenCom is looking into the PFAs’ capital raising practices.
This was done to see if the cash had been raised or sourced in a proper and legal manner.
“I can promise you that we met all of the necessary conditions,” an operator said. “Most of our funds were diverted into ensuring we met it before the deadline.”
Another source said, “The commission has been asking for evidence of recapitalisation even before the final date because it does not want the PFAs to revalue any assets as evidence of recapitalisation. They must present liquid cash or near cash assets.
“Many of them are in a last-minute rush but when the date ends, the commission will not accept any document again.
“Even those PFAs that looked as if they would not make it, they have been bringing evidence this week so you cannot rule out any company now until PenCom finishes screening their documents.”
The Pension Fund Operators Association of Nigeria had earlier said about 11 PFAs met the new capital requirement of the National Pension Commission as of the beginning of 2022.
In a circular last April, PenCOm directed PFAs to raise their shareholders’ funds from N1bn to N5bn, giving them a 12-month transition period.
The commission said at the time that its supervision function had revealed that the statutory minimum capital was no longer sufficient to cover the PFA’s operating expenses.
As the April 2022 deadline approached, some PFAs were considering mergers and acquisitions due to their new capital base of N5 billion.
