THE National Pension Commission (PenCom) has said that contribution into pension funds by Nigerians grew to over N5.2 trillion at the end of 2015. The commission said that total asset under the Contributory Pension Scheme (CPS) rose significantly with 56.28 per cent of the money totalling N2.8 trillion invested in Federal Government bonds, while 10.27 per cent or N528.76 billion was invested in treasury bills.
An insight into the investment disbursement revealed that a total of N514.28 billion representing about 9.9 per cent of the total pension assets was invested in ordinary shares.
According to the figures posted on the commission’s website, about 10.41 per cent that equals N535.90 billion was invested in local money market securities, while 4.08 per cent totalling N209.87 billion went into real estate properties.
In the same vein, about N162.03 billion or 3.15 per cent and 3.05 per cent or N156.877 of the growing funds were invested in state government securities and corporate debt securities respectively, while 1.35 per cent or N69.66 billion was invested in foreign ordinary shares by the Pension Fund Administrators (PFAs) in the period under review.
The operators invested about 0.42 per cent each amounting to N21.5 billion and N21.8 billion in open/ close end funds and cash and other assets, while 0.34 per cent or N17.3 billion and 0.22 per cent or N11.55 billion were invested in private equity funds and supra-natural bonds, respectively. There was also investment of 0.02 per cent and 0.01 per cent of the funds totalling N1.2 billion and N651.8 million in infrastructure funds and foreign money market respectively.
In his assessment of the industry, Emmanuel Akamobi, an insurance expert, observed that since the enthronement of the woman in the industry, there have been a lot of positive changes in the sector. He stated that most important of all was the security of the pension money so that any time pensioners need to get money there would not be any problem.
Speaking on the development, Mrs. Chinelo Anohu- Amazu, Director General, PenCom, noted that with the enhanced provisions of the Pension Reform Act, 2014, the commission was intensifying efforts at extending the coverage of the CPS to the underserved economic segments such as the informal sector through the micro pension initiative.
“The challenge of instituting effective and sustainable pension systems remains an issue in Nigeria as well as most African countries. However, the Federal Government took a remarkable step in changing the pension landscape through the enactment of the Pension Reform Act in 2004,” she said.
This, Anohu-Amazu added, led to the introduction of the CPS and the establishment of PenCom as the regulator of the industry. According to her, the quest to deliver better pensions to retirees guided by the experiences garnered in the 10 years of the implementation of the pension reform necessitated the revision of the 2004 Act.
After an extensive stakeholders’ consultation and legislative scrutiny, the new Pension Reform Act, 2014 was enacted, which came into effect in July of that year, she explained.
Anohu-Amazu explained that the PRA 2014 re-enacted the fundamental provisions of the repealed Act of 2004, which included the establishment of the CPS, uniform standard for pension administration as well as PenCom as the sole regulator and supervisor of pension matters in Nigeria.
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