Pension account holders’ transfers rise 90% YoY
By Jeph Ajobaju, Chief Copy Editor
A total 92,413 Retirement Savings Account (RSA) contributors changed Pension Fund Administrators (PFAs) in 2022, a 90.2 per cent rise on 48,593 who switched in 2021, according to National Pension Commission (PenCom) figures.
PenCom data shows 143,805 contributors have swapped PFAs since the reopening of the transfer window in December 2020.
A total 34,283 filed for transfer in the fourth quarter of 2022 (Q4 2022), the highest quarterly figure since the inception of the window.
The number of PFAs reduced from 22 to 19 as a result of mergers and acquisitions in the industry, after PenCom directed operators to raise minimum capital requirement from N1 billion to N5 billion
The regulator announced in April 2022 that all PFAs had complied with the directive although not without some restructuring.
PenCom approved earlier last year acquisition of AIICO Pension Managers by FCMB Pensions as well as the merger between Tangerine Pensions and APT Pension Funds Managers and their change of name to Tangerine APT Pensions.
PenCom also approved the acquisition of IEI-Anchor Pension Managers by Norrenberger after the latter acquired majority shareholders in the company.
Access Holdings received approval to acquire majority equity stake in First Guarantee Pension and acquired indirect equity stake in Sigma Pension before merging the two entities.
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Highly regulated sector
RSA holders are highly alert to developments in the industry, as shown by more than 143,000 transfers so far. Factors they consider include corporate governance, ease of services, instrument of investments, and returns, per reporting by Nairametrics.
The pension industry is highly regulated because administrators handle public funds and there is limitation of category of investments. Most funds are invested in government securities to mitigate the risk of losses.
Pension fund assets rose to N14.99 trillion in 2022, an increase of N1.5 trillion (11.7 per cent) against N13.42 trillion in 2021.
The gain in 2022 (N1.5 trillion) is 40.2 per cent higher than N1.12 trillion in 2021. But it was 24.9 per cent lower than the N2.09 trillion gain in 2020.
Investment in federal government securities grew by N870.55 billion to N9.64 trillion, most of them in form of FBN bonds (N9.22 trillion).
Corporate debt securities in 2022 amounted to N1.66 trillion, a jump of 75.99 per vent (N716.86 billion) versus N943.34 billion in 2021.