Operators Give Investment Conditions As Pension Funds Hit N11.57trn
The Pension Funds Operators Association of Nigeria has said Pension Fund Custodians and Pension Fund Administrators will obey the guidelines given to them by the National Pension Commission before releasing the growing funds in their custody for investment.
The association, which consists of the PFAs and the PFCs, also said they would consider their risk appetite before releasing the funds for investment to investors.
Latest figures obtained from PenCom on Tuesday revealed that the total funds under the Contributory Pension Scheme had risen to N11.57tn as of the end of September, of which N7.5tn had been invested in Federal Government’ securities.
The Chief Executive Officer, PenOp, Mr Oguche Agudah, who spoke to our correspondent, observed that there were reports about the government or governors borrowing trillions of naira from pension funds to finance infrastructure.
He said, “We felt the need to clarify a number of points; we would like to state that what is being referred to is a proposed infrastructure fund to be professionally managed by the Nigeria Sovereign Investment Authority.
“There have been various discussions and proposals spanning months regarding how best to structure a framework to invest in infrastructure development and also attract local pension funds and other investors – local and international.
“The discussions have centered around coming up with a structure that has a legal and commercial framework in place for this proposed infrastructure fund.
“To the best of our knowledge, this is still in the proposal stage, and not finalised.
“When and if the fund gets finalised, pension funds can decide if they will invest in the fund or not based on their individual risk appetite.”
He added that whatever investment these entities would make must follow the laid-down guidelines of the National Pension Commission on investment of pension funds.
The PenOp CEO said, “These entities have risk managers and committees that monitor and decide on investments for their firms.
“The PFA and CPFAs have a fiduciary responsibility to manage the funds they hold in trust for their contributors so that when they retire, they will have decent funds to fall back on.
“They have carried this function out successfully for the past 16 years.”
He said the industry had also been engaging with various parties on how best to individually and collectively fund infrastructure in a sustainable and responsible manner with a commercial return for the benefit of all stakeholders.