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Pension fund administrators shun foreign shares, money market securities

By on January 5, 2016

National Pension Commission (PenCom) recently released its latest investment summary for October 2015, showing that no  pension money  was invested in foreign shares and money market securities.

PenCom, in its investment summary for October, 2015, said no investment was made in foreign securities from retirement saving account active fund and retirement savings account retiree fund.

It noted that the total assets under the Contributory Pension Scheme rose to N5.14 trillion within the period.

The summary noted that 56.28 per cent of the money totalling N2.8 trillion was invested in Federal Government of Nigeria bonds, while 10.27 per cent or N528.76 billion was invested in treasury bills.

A total of N514.28 billion, which is about 9.9 per cent of the total pension assets, was invested in domestic ordinary shares. According to the figures, 10.41 per cent or N535.90 billion was invested in local money market securities, while 4.08 per cent totalling N209.87bn was invested in real estate properties.

Similarly, N162.03billon or 3.15 per cent and 3.05 per cent or N156.877 billion of the growing funds were invested in state government securities and corporate debt securities, respectively.

The operators invested about 0.42 per cent each amounting to N21.5bn and N21.8 billion in open/close end funds and cash and other assets, while 0.34 per cent or N17.3bn and 0.22 per cent or N11.55 billion were invested in private equity funds and supra-natural bonds, respectively.

The Director-General, PenCom, Mrs. Chinelo Anohu-Amazu, said 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 of Nigeria took a remarkable step in changing the pension landscape through the enactment of the Pension Reform Act in 2004,”she said.

She said despite the challenges affecting  the sector, the pension scheme under the CPS has generated funds invested in various sectors of the economy.
“It is heartwarming to note that within a decade of the implementation of the scheme in Nigeria, the story of pension administration is changing into a positive narrative; the scheme has so far delivered all the major objectives of the reforms.
“We are proud to state that since its establishment 11 years ago, there had been no case of malpractice recorded in the administration of the Contributory Pension Scheme in Nigeria,” she added.

 

[ThisDay]