Premium Pension Limited and Trustfund Pensions Limited have proposed a merger that would create Nigeria’s third-largest Pension Fund Administrator (PFA), as consolidation gathers pace in the country’s pension industry.
The proposed transaction was disclosed in a merger notification published on Tuesday by the Federal Competition and Consumer Protection Commission (FCCPC).
If approved, the two firms will combine to form Premium Trustfund Pensions Limited, a new entity expected to become the third-largest PFA in Nigeria by size.
According to the FCCPC, the transaction will be implemented through a Scheme of Merger in accordance with Section 711 of the Companies and Allied Matters Act (CAMA) 2020.
“The merger affects the Nigerian Pension Fund Administration (PFA) market. Premium Pension and Trustfund Pensions are currently the fifth and sixth largest PFAs, respectively. Following the merger, the combined entity is projected to rank third,” the Commission stated.
Under the proposed structure, all assets, liabilities and undertakings of Premium Pension will be transferred to Trustfund Pensions. Premium Pension will then be dissolved without undergoing a formal winding-up process.
Premium Pension was incorporated in 2005 and licensed by the National Pension Commission (PenCom) later that year, while Trustfund Pensions was incorporated in 2004 and also received its operating licence in December 2005.
The two firms currently manage Retirement Savings Account (RSA) Funds I to VI, including the Micro Pension Fund for workers in the informal sector, non-interest Shari’ah-compliant funds, Approved Existing Schemes, the Transitional Contributory Fund and Voluntary Contributions across Nigeria’s 36 states and the Federal Capital Territory.
According to the merger notification, the combination is expected to deliver strategic, operational and financial benefits by creating a stronger institution with greater scale and efficiency.
The merged company is expected to:
- Improve operational efficiency through cost optimisation and streamlined processes.
- Strengthen investment management with enhanced research capabilities and better asset allocation.
- Expand nationwide service delivery by leveraging the combined branch networks and digital platforms of both firms.
- Broaden product offerings to better serve workers in both the formal and informal sectors.
The proposed merger reflects a broader wave of consolidation in Nigeria’s pension industry as operators respond to changing market conditions and tougher regulatory requirements.
In 2022, Access Holdings merged First Guarantee Pension Limited with Sigma Pension following its acquisition of Sigma’s parent company, creating Nigeria’s fourth-largest pension administrator by assets under management.
Last year, Leadway Holdings completed the acquisition of Pensions Alliance Limited (PAL), further strengthening its position in the industry.
The latest deal also comes after PenCom significantly raised minimum capital requirements for Pension Fund Administrators and Pension Fund Custodians.
The regulator increased the minimum capital requirement for PFAs tenfold, from N2 billion to N20 billion. PFAs managing assets above N500 billion must now maintain a capital base of N20 billion plus 1 per cent of assets under management exceeding that threshold. Special Purpose PFAs are required to maintain N30 billion, while the Nigerian University Pension Management Company must also meet the N20 billion minimum.
The proposed merger follows another recent regulatory move aimed at strengthening the pension industry.
Last week, PenCom granted PFAs a 24-month regulatory forbearance allowing them to invest in a wider range of securities issued by the parent companies of their respective Pension Fund Custodians.
According to the Commission, the temporary measure is intended to provide greater investment flexibility, improve portfolio diversification and support stronger risk-adjusted returns for pension contributors while addressing the limited supply of quality investable instruments in the domestic market.
