The Federal Government, through the Pension Funds
Administrators, has invested N6.86bn from the workers’ monthly contributions,
in bonds meant to develop the nation’s infrastructure, as of December last
year.
Figures obtained from the National Pension
Commission on Friday revealed that the total assets under the management of the
Contributory Pension Scheme rose to N7.51tn during the period under review.
Data from the commission revealed that in May
2015, the operators invested N568m in infrastructure and increased it to
N1.35bn in December 2015.
The PFAs invested N2.06bn in infrastructure bond
in December 2016, and had gradually increased the pension funds invested in the
portfolio.
According to the commission, the operators
invested substantial part of the pension funds in Federal Government’s bonds,
treasury bills and state governments’ securities.
PenCom revealed that some of the funds were
invested in agency bonds, supra-national bonds, commercial papers, foreign
money market securities, and open/close-end funds.
Other investment portfolios where the operators
invested the funds are REITS, private equity funds, infrastructure funds, cash
and other assets.
Last year, the commission reviewed the
regulations of investment of pension funds.
In the reviewed regulations, PenCom had stated
that the PFAs must offer a multi-fund structure for the Retirement Savings
Account and that there would be a transition period of six months, effective
from the commencement date of the multi-fund structure for all the PFAs to
restructure their respective portfolios.
It stated, “The multi-fund structure shall
comprise Fund I, Fund II, Fund III, and Fund IV (retiree fund). Funds I, II,
III, and IV shall however differ, according to their overall exposure to
variable income instruments.”
Due to significant profit made from the
investment of pension funds, PenCom instructed the PFAs to raise the pensions
of retirees who opted for programmed withdrawal and were being paid by the PFAs
in December 2017.
Under the Pension Reform Act, the PFAs are
required by law to administer the funds, while the Pension Fund Custodians keep
custody of the assets.
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