Access Pensions targets informal sector in push for top PFA spot

…Consolidation key to needed growth in pensions – Uduanu

Access Pensions will target an untapped informal sector in its quest to become one of the top two Pension Fund Administrators in Nigeria by 2027, according to Dave Uduanu, the firm’s managing director/CEO.

Uduanu, who spoke in an interview on Arise TV, said that the company has a five-year plan to achieve the goal of being one of the top two PFAs. That plan includes focusing on organic growth, targeting the informal market and investing in technology and digital offerings.

“Our strategy is to be in the top 2, either one or two. We are focusing on an organic strategy and targeting the informal market which is still untapped,” Uduanu said.

Access PFA, a subsidiary of Access Corporation, only this year crossed the N1 trillion mark in Assets Under Management (AUM) in just two years after its acquisition of two other PFAs- Sigma Pensions and Fug Pensions.

The PFA became the fourth largest by AUM following the feat.

Access Pension also said that it is investing in technology and digital offerings to improve its customer service and make it easier for customers to manage their retirement savings.

Read also: Access Pensions crosses N1trn milestone in assets

“We worked on two strategies- flawless execution of the acquired entity and people, technology and process. We had to revamp our process and invest in technology and our digital offerings,” Uduanu said.

The fragmented state of Nigeria’s pension industry is clear to see and has sparked a raft of mergers and acquisitions which has led to a decline in the number of pension fund administrators in the country to 19 from 22 before a recapitalisation exercise in 2021. But it has not been enough as evidenced by the slow growth of pension assets.

Pension assets rose 11.8 percent to N16.76 trillion at the end of June 2023 compared to December 2022, according to data by PENCOM.

Read also: Access Pensions adds financial planning to help customers retire well

Despite the growth, the country’s pension assets come to only 7.8 percent of GDP and is well behind the 29.4 percent average for a group of 78 peer countries selected by the World Bank.

Further consolidation is needed in the industry for it to achieve the required growth and be at par with its peers, according to Uduanu.

“I have always talked about the need for consolidation due to the fragmentation in the industry,” Uduanu said.

“There are 18 registered PFAs in Nigeria and with the distribution of the N16.76 trillion in assets under management by the different PFAs, you can clearly see the fragmentation,” Uduanu said.

Read also: Access Pensions promises top-notch service to customers

“Five PFAs control about 70 percent of the market, and 10 PFAs account for 19 percent while the rest share what’s left,” he said.

According to the National Pension Commission, the ranking of PFAs by cumulative pension contributions received from the inception of the Contributory Pension Scheme (CPS) to the end of the first quarter 2023 shows that the top five ranked PFAs received 70.98percent of the total contributions as of the end.