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PenCom to diversify pension investments in July

By on June 18, 2015

The Head, Investment Supervision Department, National Pension Commission, Mr. Ehimeme Ohioma, has said that a multi-fund structure that will guide pension fund investment will be ready next month.

Speaking at a stakeholders’ forum of the Nigeria Employers’ Consultative Association and National Pension Commission in Lagos, he explained that the commission was planning to introduce a multi-fund structure for RSA funds to address the varying risk appetite of contributors.

He said that the investment structure would be categorised into four groups depending on the age of the pension contributors and these comprised employees below 35 years, those between 35 and 45 years, 50 years and those ready to retire.

Ohioma explained, “The young ones, that is, people below 35 years have between 20 and 25 years to work. Their funds will be invested in variable income securities that have higher returns because they are long-term. These funds generate returns above inflation returns. We will have more investments in ordinary shares, mutual funds and infrastructural funds.

“For people between 35 and 45 also, the percentage of investment in variable income securities may not be as high as people below 35 years because as you grow older, your risk capital reduces and the percentage of investment will be lower.

“For people above 50 years and not retired, you are close to retirement and your fund will be invested in a way that will be beneficial to you. Less investment in variable income security and more investment in fixed income security.”

He added that only 70 per cent of companies registered with the Securities and Exchange Commission were qualified for the pension fund investment.

As one of the safety measures put in place to secure pension fund investments, he said pension fund asset investment could only be done on the SEC platform and should have track record of profitability.