Pension Fund Administrators (PFAs) have allocated a substantial N130.18 billion from the Contributory Pension Scheme to infrastructure investments by the conclusion of September 2023, according to data released by the National Pension Commission in its unaudited report on the pension funds industry portfolio.
The report, covering Approved Existing Schemes, Closed Pension Fund Administrators, and RSA Funds, also included unremitted contributions at the Central Bank of Nigeria and legacy funds.
During the same period, the total assets managed under the Contributory Pension Scheme reached N17.35 trillion. Additionally, a portion of the funds was diversified into various investment channels, including domestic and foreign ordinary shares, federal and state governments’ securities, and money market instruments.
In response to these developments, the National Pension Commission amended its investment regulations, outlining specific requirements to guide the investment of these funds in accordance with the provisions of the Pension Reform Act of 2014. The primary objective of these regulations is to establish consistent rules and standards for the investment of pension fund assets.
The regulations specify that pension fund custodians are required to adhere strictly to written instructions from licensed PFAs concerning the investment and management of pension fund assets held in the custody of PFCs on behalf of contributors. Moreover, the regulations restrict PFCs from outsourcing the custody of pension fund assets to third parties, except for allowable investments made outside Nigeria.
The commission emphasized that prior approval must be obtained before engaging a global custodian for allowable foreign investments. Furthermore, PFAs, in fulfilling their contractual responsibilities to contributors, are restricted from outsourcing the investment and management of pension fund assets to third parties, with exceptions granted for open/close-end/hybrid funds and specialist investment funds as permitted by the regulations. This regulatory framework is designed to ensure uniformity, transparency, and adherence to standards in the management of pension funds, safeguarding the interests of contributors under the Contributory Pension Scheme.
