Matthew Otoijagha
The Pension Funds Administrators have invested N6.86 billion from the workers’ monthly contributions, in the Federal Government bonds meant to develop the nation’s infrastructure, as of December 2017.
The figures obtained from the National Pension Commission revealed that the total assets under the management of the Contributory Pension Scheme rose to N7.51 trillion during the period under review.
But data from the commission revealed that in May 2015, the operators invested N568 million in infrastructure and increased it to N1.35 billion in December 2015.The PFAs invested N2.06 billion 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 fundsIn 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 that, “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 these were 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 take custody of the assets.