MATTHEW OTOIJAGHA
Nigerian banks borrowed N662.8bn from the total pension funds under the Contributory Pension Scheme as at the end of May 2018. Figures obtained from the National Pension Commission revealed that this amounted to 8.4 per cent of the total pension assets, which was N8.14tn during the period under review.
According to the report, the amount the Pension Fund Administrators invested in the banking sector was N409.48bn in January 2017. PenCom also revealed that the total assets under the CPS rose to N8.23tn at the end of June 2018.
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. The figures specifically indicated that the number of contributors grew by 312,291 from 7.89 million in December 2017 to 8.14 million as of June 2018.
“The net assets value of the pension assets of the contributory pension fund was N8.23tn as of June, 2018. This represents an increase of N716.94bn up from the value of N7.52tn as of 31st December, 2017. This increase is attributed to new contributions received, interest/coupon from fixed income securities and net realized/unrealized gains on equities and mutual fund investments.”
The commission said the operators had invested a substantial part of the pension funds in the Federal Government’s bonds, treasury bills and state government securities. The report stated that some of the money was 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 real estate investment trusts, private equity funds, infrastructure funds, cash and other assets.