• Wednesday, June 12, 2024
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BusinessDay

Competition hots up as pension fund managers consolidate

Fierce competition has emerged as pension fund administrators (PFAs) are gearing up to ramp up their market share.

Access Pensions Limited recently became the second largest in terms of the number of contributors following its successful acquisition of two other PFAs, raising the prospects of more business combinations in the industry.

The latest is Premium Pensions Limited, now on the list of the top five PFAs, having recently confirmed that it was engaging for a business combination with another PFA, which market analysts say would further alter the structure of the industry if it becomes successful.

Premium Pensions, in a message to its customers recently, said its attention had been drawn to rumours of a possible business combination between Premium Pension Limited and another PFA.

It said, “We would like to assure you that the interest of our customers remains our top priority in any decision we make.

“With over N1 trillion in Assets Under Management and a track record of consistent above industry average investment performance and growth, our fundamentals and projections remain very strong.”

Premium Pensions assured its customers that any consideration around its future growth plans would be in line with its aspirations and would take into account the interest of its stakeholders.

“While discussions are ongoing, no definitive agreement has been reached yet and due processes are being followed,” it said. “The proposed combination, if it materialises, is aimed at bolstering our market position and deepening our pension services so that we can serve you better.”

At the end of the first quarter of 2023, Stanbic IBTC Pension led the PFA table since inception, with 2,015,150 million retirement savings account (RSA) holders, equal to 20.3 percent of the total registered contributors, now standing at 9.946 million as at March.

Access Pension came second for the first time, pulling 1,064,906, equal to 10.7 percent of the total registrations, which market watchers believe is being driven by its successful acquisitions of Sigma Pensions and majority stake in First Guarantee Pensions.

ARM Pensions Limited came third with 896,635 RSA holders, equal to 9 percent of the total registered contributors. Trust Fund Pensions Limited came fourth after enrolling 4,300 participants in first quarter, with its total enrolment hitting 801675, equal to 8.1 percent of total RSA holders.

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Analysis of the distribution of RSA registrations across PFAs in the first quarter of 2023 revealed that Stanbic IBTC continued to maintain the largest market share of 28 percent with 23,586 new registrations, followed by Access Pensions Limited, which had 11 percent market share with 9,546 new registrations.

The cumulative pension contributions, from inception to the end of the first quarter of 2023, amounted to N8.70 trillion, just as aggregate pension contributions of the public sector increased from N4.02 trillion in the first quarter of 2022 to N4.15 trillion at the end of second quarter of that year.

Similarly, the aggregate pension contributions of the private sector also increased from N3.76 trillion in the first quarter of 2022 to N3.86 trillion as at the end of second quarter.

At the end of May 2023, total pension assets managed by PFAs has reached N15.77 trillion, with 9.995 million RSA contributors.