…as FG borrows N66.1% of funds
The nation’s pension assets have hit N17.29 trillion at the end of August 2023, indicating a 15.34 percent growth when compared with N14.99 trillion as at December 2022, data from the National Pension Commission has said.
During the period, pension assets amounting to N11.47 trillion, equal to 66.3 percent where invested in Federal Government Securities, followed by Corporate Debt Securities, which accumulated 10.74 percent and Money Market instruments 7.51 percent.
Equities market took 9.32 percent of the total pension assets, amounting N1.611 trillion, while money market instruments accumulated 7.51 percent, equal to N1.298 trillion.
Aisha Dahir-Umar, said during an engagement with the organised Private Sector (OPS) in Lagos that the Commission has continued to take giant strides towards ensuring the smooth implementation of the contributory Pension Scheme (CPS), through the revision of existing regulations and guidelines and the development of new ones.
She said, specifically, the Commission has deployed the Enhanced Contributors Registration System (ECRS) for the pension industry.
“Following, the deployment of the ECRS, the Commission also introduced the Data Recapture Exercise (DRE), which mandatorily requires all RSA holders who joined the CPS prior to the 1st of July 2019 to update their information with their respective Pension Fund Administrators (PFAs).”
Accordingly, the Commission has consistently urged RSA holders to approach their PFAs for Data Recapture, she said.
The PenCom Boss said in order to facilitate the implementation of Section 13 of the PRA 2014, which allows an RSA holder to transfer his/her RSA from one PFA to another at least once in a year, the Commission developed and deployed the RSA Transfer System (RTS) in 2020, adding that the RTS is a computer-based application for initiating, processing, and monitoring the RSA Transfer process and that it also ensures the seamless transfer of RSAs from one PFA to another.
She said other key activities of the commission to which guidelines have been issued include – Equity Contribution For Residential Mortgage by RSA Holders in fulfilment of (Section 89 (2) of PRA 2014; access to equity finance for RSA holders in the Contributory Pension Scheme (CPS); improve the standard of living of RSA holders under the CPS by facilitating their ownership of residential homes during their working life; improve enrolment in the CPS by providing incentives to employees who are yet to open RSAs, as well as provide a sustainable source of long-term finance to the mortgage sector and spur development in the housing sector.
Other measures include approval of co-investment of pension funds, which she noted will foster increased investment in Private Equity (PE) asset class.
The Commission had issued the Operational Framework on co-investment of Pension Funds to allow PFA’s co-invest alongside the main PE Fund in order to provide PFAs flexibility and greater choice in the type of projects/companies in which pension funds are invested, thereby further enhancing returns and increasing exposure to PE.
To address the inflationary and currency devaluation pressures on the value of pension funds, she said draft guidelines on investment of pension funds in foreign currency denominated assets is being developed, which is hoped would serve as a hedge against inflation and naira devaluation, thereby protecting the value of pension assets.