Ebere Nwoji
As pension sector operators continue to race towards meeting the regulator’s recapitalisation requirements with June 30th, 2027 as deadline, their attention has been drawn to issues that lie ahead after recapitalisation.
These issues have been summarised in an acronym titled SCOPE, which the expert described as scale, compliance and regulatory awareness; organisational adoption of technology, people strategy and culture, external engagement and differentiation.
Former Chief Executive officer of Pension Operators Association of Nigeria (PenOp), Mr Oguche Aguda, stated this while delivering a paper titled, “Post Recapitalisation and Market Dynamics in Nigerian Pension Industry,” at the 11th Annual National conference of Nigerian Association of Insurance and Pension Editors( NAIPE).
He said the need for scale manifested in business combination witnessed in pension sector some of which are the combination between Trust- fund Pensions and Premium Pension and the combination between Leadway and Pal pension.
He highlighted the advantages of these as gaining economics of scale by the various firms involved, increasing complexity of operations , streamlining costs and competing effectively in the market place.
On compliance and regulatory awareness, Aguda noted that pension was the most rejected sector and this has made the regulator to be at the centre of the industry ensuring that operators have sound compliance and culture.
On adoption of technology, he said operators must ask themselves the question on how to leverage technology to make their operations quicker, simble and help them to scale.
According to him, they should also meditate on how to use Artificial Intelligence to compete as well as how to manage cyber security threat.
Aguda who featured as keynote speaker on pension matters at the conference highlighted fact about the on going recapitalisation exercise in pension sector as pension sector regulator PenCom having mandated all licensed pension fund administrators to raise their minimum capital from N5 billion to N20 billion, and one percent more if their Asset Under Management is above N500 billion by June 2027.
Aguda said second fact about recapitalisation in the pension sector is PenCom mandating all licensed pension fund custodians ( PFCs) to raise their minimum capital to N25 billion by June 2027.