Access Pensions targets informal sector in push for top PFA spot

According to Dave Uduanu, the company's managing director/CEO, Access Pensions will target an untapped informal sector in its effort to rank as one of Nigeria's top two pension fund administrators by 2027.

In an interview with Arise TV, Uduanu stated that the organization has a five-year strategy to reach its objective of becoming one of the top two PFAs. The plan calls for investing in technology and digital offerings, concentrating on organic growth, and pursuing the untapped market.

"Our aim is to be one or two in the top 2. The informal sector, which is largely untouched, is our aim as we concentrate on an organic strategy, according to Uduanu.

Just two years after acquiring two additional PFAs—Sigma Pensions and Fug Pensions—Access PFA, a division of Access Corporation, reached the N1 trillion asset under management (AUM) milestone this year.

Following the achievement, the PFA rose to the fourth-largest position by AUM. Additionally, Access Pension stated that it is putting money into digital and technological advancements in order to enhance customer service and make it simpler for clients to manage their retirement savings.

"We focused on two strategies: people, technology, and process, and perfect operation of the purchased firm. We had to rework our procedure and make investments in technology and our online services, according to Uduanu.

There are 19 pension fund administrators in Nigeria now, down from 22 prior to a recapitalization exercise in 2021 due to the country's fragmented pension market, which has generated a flurry of mergers and acquisitions. The modest increase in pension assets, however, shows that it has not been sufficient.

According to PENCOM data, pension assets increased 11.8 percent to N16.76 trillion at the end of June 2023 from December 2022.

Despite the growth, the nation's pension assets only account for 7.8% of GDP, which is much below the average of 29.4% for 78 peer countries chosen by the World Bank. According to Uduanu, further consolidation is needed in the sector if it is to grow and catch up to its competitors.

Uduanu further stated, "I have constantly discussed the need for consolidation owing to the dispersion in the market. "You can clearly see the fragmentation," said Uduanu, "with the distribution of the N16.76 trillion in assets under management by the different PFAs. There are 18 registered PFAs in Nigeria."

Ten PFAs account for 19% of the market, while five PFAs control roughly 70% of it, according to him. The remaining companies split the remaining market.

The top five ranked PFAs received 70.98% of the total contributions as of the end, according to the National Pension Commission's ranking of PFAs based on cumulative pension contributions received from the start of the Contributory Pension Scheme (CPS) through the first quarter of 2023.