Pension Assets Rises to N6.7tn in May 2017

The total assets under the Contributory Pension Scheme rose to N6.7tn as of the end of May, this year.

Figures obtained from the National Pension Commission on Friday showed that 73.14 per cent of the total funds had been invested in the Federal Government of Nigeria’s securities.

The FGN investments are N3.8tn and N1.12tn, amounting to 56.47 per cent invested in the FGN bonds, and 16.67 per cent of the funds invested in the FGN treasury bills, respectively.

According to the figures, N539.78bn, which is 8.02 per cent of the funds, was invested in domestic ordinary shares; while N385.08bn, totalling 5.72 per cent of the funds, was invested in banks.

The pension operators invested N258.2bn, N216.07bn, N106.2bn and N93.4bn, totalling 3.8 per cent, 3.2 per cent, 1.5 per cent and 1.3 per cent in corporate debt securities, real estate properties, state government securities and foreign ordinary shares, respectively.

PenCom said the aggregate pension assets under the CPS grew from N4.61tn as of the end of December 2014 to N5.3tn in 2015.

Earlier in the year, the commission reviewed the regulations of investment of pension funds.

In the reviewed regulations, PenCom stated that the Pension Fund Administrators must offer the 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, “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 among themselves, according to their overall exposure to variable income instruments.”

The commission said the exposure to variable income instruments was defined as the sum of a PFA’s investments in ordinary shares and participation units of open close-ended and hybrid funds; real estate investment trust; infrastructure funds; and private equity funds comprising its current holdings and any future financial commitments to the acquisition of participation units in the funds.

Under the Pension Reform Act, the PFAs administer the funds, which are kept in the custody of the Pension Fund Custodians.

PenCom stated, “The requirements of the regulations are consistent with the provisions of the Pension Reform Act, 2014. The purpose of the regulations is to provide uniform rules and standards for the investment of pension fund assets.”