PenCom Refutes Claims of Lending N10 Trillion to Federal Government

PenCom Raises Alarm Over Failure Of Some Employers To Provide Accurate Documentation

Aisha Dahir-Umar, the Director General of the National Pension Commission (PenCom), has vehemently denied assertions that the commission extended a loan of N10 trillion to the Federal Government.

The House of Representatives, in October, passed a motion directing its Committee on Pensions to recover N10 trillion in pension funds allegedly borrowed by the Federal Government.

Dahir-Umar, in an interview conducted over the weekend, rebuffed these claims, emphasizing that PenCom does not function as a bank and does not hold or manage pension funds. She clarified that the Federal Government did not receive a loan of N10 trillion from the commission.

She stated, “Investments made by the Pension Fund Administrators (PFAs) in Federal Government securities are not loans as mischaracterized but rather investments in securities, such as bonds and treasury bills, as sanctioned by relevant government agencies, including the Debt Management Office and Securities and Exchange Commission. These investments are traded on authorized capital markets, namely the Nigerian Exchange Limited and FMDQ OTC Securities Exchange.”

Dahir-Umar further explained that pension fund assets are not under the direct management of PenCom. Instead, they are managed by licensed PFAs and held in custody by licensed Pension Fund Custodians. She clarified that PFAs are responsible for investing pension fund assets in permissible asset classes, including Federal Government debt instruments, with the primary objectives being safety and fair returns.

Responding to allegations of PenCom owing pension arrears to Federal Government retirees, Dahir-Umar contended that the Federal Government consistently fulfills its repayment obligations.

Regarding outstanding benefits for Federal Government retirees, she attributed delays to insufficient and tardy funding for the payment of Accrued Pension Rights for individuals who served before the introduction of the Contributory Pension Scheme in 2004. Dahir-Umar noted that the release of funds for accrued rights payment falls within the purview of the Federal Government, citing budgetary constraints as a hindrance.

She reassured that beneficiaries enrolled under the Contributory Pension Scheme have been receiving their benefits through their PFAs, affirming that there are no unresolved complaints before the commission.

The total assets under the Contributory Pension Scheme reached N18.36 trillion by the close of 2023, indicating the continued growth and stability of the pension system in Nigeria.

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