• Friday, June 14, 2024
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Pension fund managers to show more clarity in performance next year

Investment One acquires Royal Trust Pension Administrators

In 2022, contributors and retirees would begin to see clearly the difference in the performance of all the registered Pension Fund Administrators (PFAs).

The clarity in reporting will enable them to make informed decisions on their choice to remain with a particular PFAs or pot to another one where they find greater value in the ongoing transfer window rush.

This is coming on the heels of the decision of the Pension Fund Operators Association of Nigeria (PenOp) to adopt a uniform reporting standard for all operators in the industry.

Wale Odutola, president, PenOp looking into plans of the industry in 2022, said the industry would adopt uniform and standard metrics of performance reporting so that contributors can be better informed.

This development according to industry watchers will end the wrangling that usually comes up among PFAs whenever fund performance is reported by independent analysts, as hardly does all the PFAs agree to the correctness of such reports.

In the past, some who probably did not get favoured at a given time fault the performance index as not the right metrics to measure the PFAs since all of them did not start operations at the same time, while others would feel there are other metrics.

This decision of the Association is hoped would rest the matter finally, and help contributors and retirees understand better where they should pinch their tent.

Wale Odutola said another major project of the PFAs in 2022 would be improving the data quality of the pension industry.

According to him, data-recapturing exercise has been contracted-out to independent consultants that will ensure the quality of the data is guaranteed because it is key to the sustainability of the industry.

He said the industry would continue to find ways for greater inclusion, as many plans were in place to drive the micro pension scheme.

“We already have a joint committee made up of the operators and the National Pension Commission (PenCom) that are working out strategies to drive the micro pension scheme across the country, Odutola said.

On investment, he said the operators and engaging with relevant stakeholders on how to invest in private equities, variable income assets.

“Conversations are ongoing in these areas with identified segments, and these will be deepened in the coming year, Odutola said.

Read also: Pension sector braces for competition on new investors

Meanwhile, the industry is anticipating increased competition in service delivery, returns on investment after the ongoing recapitalisation of the sector that started in April 2021.

Industry analysts see the recapitalisation fever being intensified in the first quarter of 2022 when the recapitalisation exercise would be ending.

At the last count, a new investor, Tangerine Group has come into the sector merging with APT pensions, having acquired AXA Mansard Pensions earlier, while GTB Holdings has acquired Investment One Pensions; and FCMB has acquired AIICO Pensions, confirms Ehimeme Ohioma, head, Surveillance at the National Pension Commission (PenCom).

This is as 11 Pension Fund Administrators, out of 22 registered operators are said to have met the capital requirement ahead of next year deadline,

Ehioma commenting on the ongoing recapitalisation exercise in the sector said the ongoing capital phase in the industry has attracted new investors, which no doubt will make the sector highly competitive.

According to him, the success of the exercise will climax before the deadline in the first quarter of next year, as more mergers and acquisitions are expected.

He said that the present capital raise approved by the PenCom board in April 2021 is the third of such since the coming on board of the Contributory Pension Scheme (CPS) through the Pension Reform Act 2004.

The first, according to him, was the N150 million capital base in the repealed Pension Reform Act 2004, followed by the second recapitalisation to N1 billion in 2011, and now, the third from N1 billion to N5 billion now.

Ohioma said that the objective of the recapitalisation is to improve the financial stability and operational efficiency in the industry, noting that the directive was right, as it could not have come at a better time than now after the last exercise in 2011.

As of September 30, 2021, total pension assets under management rose to N13.001 trillion from N12.901 trillion at the end of August 2021, while registered contributors increased to 9.461 million within September.