Business

N3.8tr pension funds sit idle, PenCom laments

Published

9 years ago

September 28, 2015

The National Pension Commission (PenCom) has lamented, that in spite of its efforts to stimulate growth in the economy by making available the N3.95 trillion pension funds in its keep to finance infrastructure, only N156.3 billion has been utilized.
The commission, noted that about N3.77 trillion which could be used in financing the infrastructural challenges in the country is still sitting idle, and untapped.
Director-General of the organisation, Mrs. Chinelo Anohu-Amazu, who made this known in a recently released document, said the Commission has been making efforts to stimulate growth in the economy by introducing new asset classes into the portfolio of the pension funds as provided by the PRA, 2014.
According to her, the Pension Reform Act 2014 introduced Infrastructure Funds and Bonds to bridge the gap in infrastructure and housing financing.
The PenCom chief said the Act has stipulated the allowable instruments for investment of pension funds and assets, stressing that the instruments must be structured and traded on the platform of a Stock Exchange licensed, or recognised by the Securities and Exchange Commission (SEC); and Money Market Platforms approved by the Central Bank of Nigeria (CBN).

She also stated, that in exercise of its regulatory responsibility, the Commission has issued regulation on Investment of Pension Fund Assets to further guide and advance how the pension contributions should be invested.
The pension assets have been largely invested in Federal Government Securities, Equities, Money Market Instruments and Corporate Debt.
The Commission said it recognised that the expansion of the Contributory Pension Scheme (CPS) has created a dearth of investment outlets, and that it has observed that there is the risk of concentration of investment portfolio especially in Bonds and Fixed Income Securities.

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