Pencom begins multi-fund structure for pension assets

Matthew Otoijagha

The National Pension Commission has said the implementation of the multi-fund investment structure for all active contributors under the Contributory Pension Scheme would commence on July 1 this year. The Head, Investment Supervision Department, PenCom, Mr. Ohioma Ehimeme, said this at a workshop with the theme, ‘Contributory Pension Scheme: Achievements and challenges’.

He noted that new initiative would help to improve returns on pension funds. Ehimeme said the main objective of the Retirement Savings Account Multi-Fund Investment structure was to resolve the challenge of asset- liability risk management experience by pension funds.

This, he noted, would be achieved by better aligning the risk return expectations of contributors, better matching of pension assets and liabilities, and diversification of pension fund portfolios. To achieve this, he said minimum limits would be set for aggregate investments in variable income securities for each of the four funds under the scheme.

Ehimeme stated that the first and second funds would be for young contributors under 49 years, adding that between 60 per cent and 70 per cent of these contributions would be invested in bonds and treasury bills, while the balance would be invested in money market and other instruments.

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