The National Pension Commission (PenCom) is focused on achieving measurable impact of the country’s growing pension funds on the economy through a diversified investment portfolio.
The focus is to have more measurable impacts on the Nigerian economy through diversified and increased investment of pension funds in infrastructure, real estate and alternative assets, the Commission said in Lagos on Monday.
The country’s pension fund assets stands at N12.66 trillion as at 30th June 2021, with 9.38 million contributors registered under the Contributory Pension Scheme (CPS).
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Ibrahim Kangiwa, head, Research and Strategy Management at PenCom, speaking on strategic focus of the Commission for the 2021 financial year during a workshop organized for Insurance and Pension Journalists said “the Commission is determined to revise this by emphatically supporting an investment climate that mitigates single obligor risks and hedges pension fund assets against inflation.
According to him, the current profile of Pension Fund Investment portfolio in Nigeria indicates about 70 percent uptake in Federal Government of Nigeria (FGN) Securities, this we intend to change through diversification of the portfolio, Ibrahim said.
Kangiwa said the Pension Fund Investments have remained largely in favour of FGN Securities due to paucity of infrastructural/alternative asset products in the Nigerian financial markets.
According to him, the Commission is making effort to increase pension fund investment uptake by engagement with relevant stakeholders in a bid to promote safe investment in infrastructure development; collaborations with relevant Government Agencies and the Organized Private Sector for viable Public Private Partnership arrangements in infrastructure for pension fund investment.
He stated that it was in view of the objective, that the Commission recently establishment the Non-Interest Fund (Fund VI) among the Fund types to be managed by Pension Fund Administrators (PFAs). “It required the PFAs to invest Fund VI assets in ethical and Non-interest compliant instruments in line with Islamic Financial Jurisprudence.”
Aisha Dahir-Umar, director general of PenCom in her welcome remarks at the workshop said the emergence of the COVID-19 pandemic necessitated a review of business processes across various organizations including the Commission.
She said, with the socio-economic disruptions of the entire global order, and multifarious challenges in conducting hitherto routine activities, it became imperative for the Commission to deepen technological innovation as it seeks to navigate through the challenges imposed by the pandemic.
Aisha Dahir-Umar said the theme of workshop: ‘Positioning the Pension Industry in a Post COVID Era’, highlights the Commission’s laudable response to the pandemic through technology and engagement with relevant stakeholders.
“The most recent technological innovation introduced by the Commission is the in-house designed and developed online Enrolment Application, which has capabilities to register, verify and enroll prospective retirees of Treasury-Funded Federal Ministries, Departments and Agencies (MDAs).
According to her, by the deployment of this new application, mass gathering of people has been avoided while enhancing convenience for the prospective retirees through a seamless enrolment process.
“Another notable technological innovation by the Commission was the design and deployment of the Retirement Savings Account (RSA) Transfer System (RTS), which was launched in November 2020. The RTS is a Computer Application developed by the Commission, through which RSA holders transfer their RSAs from one Pension Fund Administrator (PFA) to another. Indeed, the activation of the RSA transfer provision, which deepens individual choices, is a major milestone in the implementation of the CPS, she said.
Aisha Dahir-Umar, informing on successes made with growing the pension funds, said the number of registered contributors under the CPS has grown to 9.38 million while pension fund assets have accumulated to N12.66 trillion as at 30 June 2021.
The maintenance of a consistent growth trajectory continues to justify the Commission’s overriding investment philosophy of ensuring the safety of pension fund assets, she noted.
She noted that the workshop will have presentations on the Commission’s Strategic Focus Areas and these comprise areas of emphasis that are pursued vigorously towards the attainment of the Commission’s objectives.
“Public enlightenment and education is one of the five Strategic Focus Areas currently pursued by the Commission, and is considered germane considering that after seventeen years of pension reform in Nigeria, there still exists a knowledge gap on the CPS. Consequently, the Commission is committed to reinvigorating its public enlightenment and education drive in order to address this challenge.”
“Other Strategic Focus Areas include the resolution of outstanding pension liabilities of the Federal Government, which President Muhammadu Buhari had recently approved the Commission’s submission on the payment of some outstanding pension liabilities of the Federal Government, under the CPS; Others are portfolio diversification of pension fund investments, improvement in customer service delivery across the pension industry and unrelenting pursuit of sustainable growth of the pension industry by expanding coverage of the CPS, she disclosed.
“The other presentation provides insights into the features of the RSA Transfer System (RTS), which enables the seamless transfer of RSAs from one PFA to another. The third presentation is on the online Enrolment Application for verification and enrolment of prospective retirees of Treasury-Funded MDAs.”
