The Pension Funds Administrators, PFAs, invested N8.14tn of the total assets under the Contributory Pension Scheme in the Federal Government’s securities as of the end of November.
The National Pension Commission (PENCOM) disclosed this in its unaudited report on pension fund portfolio, which was obtained by Biz Watch Nigeria on Friday.
This amount represented 66.23 per cent of the total pension fund available on the contributory pension scheme.
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According to the report, the total funds under the CPS stood at N12.29tn during the period under review.
Out of the Federal Government securities, N7.38tn was invested in FGN bonds; N642.0bn in treasury bills; N6.3bn in agency bonds (NMRC & FMBN); N100.07bn in sukuk bonds; and N11.81bn in green bonds.
Other investment portfolios where the operators invested the funds are real estate investment trusts, private equity funds, infrastructure funds, cash and other assets.
Government securities are regarded as risk-free investment and are usually issued by the Central Bank of Nigeria on behalf of the Federal Government of Nigeria.
Due to the coronavirus pandemic, analysts predicted that Federal Government Securities, in which almost 70 per cent of the fund, are invested may yield low returns.
The Head, Corporate Communication (PenCom) Mr Peter Aghahowa, recently stated that although the pandemic would affect pension globally, the fund would also bounce back because it is a long-term fund.
He, however, stated that the commission had been very careful with regulations on pension fund investments.
According to him, loss from the crash at the stock market will be very minimal because most PFAs invest below their limit in the stock market.
The Director, Centre for Pension Right Advocacy, Ivor Takor, in a statement on the contributory Pension Scheme had noted that the Contributory Pension Scheme had created a huge pool of long-term investable fund, which should be utilised for infrastructural development.
He explained that pension fund was about investment and not borrowing.
According to him, PFAs were investing organisations and not lending organisations.
He added that Retirement Savings Accounts of workers were neither guaranteed by the federal and state governments nor any other organisation.
As such, Takor said the accounts and the funds in them were open to operation and investment risk, which is borne by the owners of the accounts.
He argued that the law did not confer on the federal or state governments the power to decree or order how the funds in private individuals’ RSAs should be invested.
