•At N2.22tn, new entity may hold industry’s largest asset base
The National Pension Commission (PenCom), yesterday announced that it has granted approval for the merger between ARM Pension Managers (PFA) Limited and Access Pensions Limited to form a new entity named Access ARM Pensions Limited.
In a statement, PenCom stated that the merger was expected to result in the achievement of economies of scale, improved operational efficiency of the new entity as well as improved service delivery to Retirement Savings Account (RSA) holders.
The merger brings the total number of Pension Fund Administrators (PFAs) in the country to 18.
In what could emerge as one of biggest mergers/acquisition in the pension industry, THISDAY had reported earlier in January that Access Golf Nigeria Limited was seeking to acquire 81.82 per cent of the issued share capital of ARM Pension Managers (PFA) Limited from its majority shareholder, ARM Traditional Asset Management Limited.
The Merger of ARM Pension and Access Pensions would create a pension fund administrator with assets under management (AUM) of just over N2.22 trillion, according to the Federal Competition and Consumer Protection Commission (FCCPC) which vets such union to ensure fair play.
The expected revenue and cost synergies are material and promise significant long-term value.
The enlarged Access Pensions would provide customers with an enhanced service offering, support the rollout of micro pension products and provide a better overall customer experience.
With final regulatory nod, Access Pensions may emerge as the large PFA in the country by pension assets under management.
Currently, the largest PFA is Stanbic IBTC Pensions Limited, followed by ARM Pension Managers.
Access Golf is an investment vehicle that owns the majority shareholding in Access Pensions, which is a Pension Fund Administrator (PFA) incorporated in Nigeria and licensed and regulated by (PenCom).
Access Pensions principal activity is pension fund administration (PFA) involving management of retirement savings account and legacy funds.
Similarly, ARM Pension in addition to Access Pensions activities also offers other pension products and services including retirement advisory, programmed withdrawal; micro pension, and additional voluntary contribution.
Following the acquisition, ARM Pension and Access Pensions which are the merging entities will merge and become one entity.
The merger was consummated through a Scheme of Merger.
Under the terms of the Scheme, ARM Pension will transfer all its assets, liabilities and undertakings to Access Pensions.
Meanwhile, official industry data had earlier indicated that Stanbic IBTC Pension Managers Limited, Access Pension Limited, ARM Pension Managers Limited, Trustfund Pensions Limited and Premium Pension Limited are PFAs that account for 56 per cent of pension enrolment.
Stanbic IBTC Pension led the pack with 2,015,150 retirement savings account (RSA) holders, equal to 20.3 per cent of the 9.95 million registered contributors as of March 2023, according to PenCom.
Access PFA had 1,064,906 or 10.7 percent of the total registrations, which some 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 or nine per cent of the total registered contributors.
Trust Fund Pensions Limited enrolled 4,300 participants in the first quarter of 2023, with its total enrolment hitting 801,675 or 8.1 percent of total RSA holders.
Premium Pension Limited came fifth with 778,874 RSA holders or 7.9 percent of the total registered contributors.
PenCom data showed that 83,654 new RSAs were registered and the associated PINs issued to employees in different sectors.
Further breakdown Analysis of
of RSA registrations across PFAs in the first quarter revealed that Stanbic IBTC continued to maintain the largest market share of 28 percent with 23,586 new registrations. It was followed by Access Pensions Limited, which had 11 per cent market share with 9,546 new registrations.
ARM Pension Managers (PFA) Limited, Leadway and Premium Pension Limited accounted for nine percent, eight percent, seven per cent respectively.
The five PFAs collectively held about 63 per cent of the 53,353 RSAs registered in the quarter under review.
PenCom data further revealed that total pension contributions remitted to individual RSAs in Q1 stood at N225.49 billion, with the public sector accounting for N124.70 billion or 55.30 percent, while the private sector contributed N100.79 billion or 44.70 percent.
The cumulative pension contributions from inception to the end of the first quarter of 2023 amounted to N8.70 trillion.
The total number of registered RSA holders was 9,945,537 as of March 2023, while total pension assets under management by the 19 PFAs stood at N15.583 trillion
In its 2024 Insurance Industry Report, Agusto & Co., noted that the country’s total pension assets rose to N18.36 trillion in 2023, representing a 22.34 per cent increase from the N14.99 trillion in 2022.
At the end of 2023, the number of licenced PFAs had decreased from 19 to 18 following the acquisition of ARM Pension Managers by Access Pensions.
These 18 PFAs held over N16.6 trillion in assets under management, representing a 39.5 per cent increase from the N11.9 trillion reported by the 19 PFAs at the end of 2022.
The industry maintains an oligopolistic nature, with the top five players controlling over 72 per cent of pension assets while accounting for over 59 per cent of total enrollees.
Stanbic IBTC continued to lead the industry both in terms of AuM, accounting for an estimated 37.4 per cent (N6.2 trillion) of the total, and enrolee base with a 20.4 per cent (c. 2.1 million) share of total registered pension contributors in 2023.(Thisday)
