Dr Pius Apere, Chairman/Chief Executive Officer of Achor Actuarial Services Limited, has stated that it is crucial for Pension Fund Administrators to look into investment opportunities that will lessen the impact of inflation on the increasing assets under their care.
In a presentation titled “Recapitalization for PFAs and the Welfare of Nigerian Pensioners,” he made this statement.
He said, “On the other hand, the stakeholders expect that with the new increase in the minimum share capital requirement, the investment of funds generated by the PFAs, which is determined by the Pension Fund Custodians as stipulated by the laws guiding pension fund investment, should explore other investment opportunities in the foreign investment markets, risky assets such as infrastructure, property, structured products and others, to provide real returns to contributors to reduce the effect of rising inflation.
“However, this is likely to expose the RSA holders to significant investment risks since investment decisions are taken by them.”
According to Apere, there is no proof that PFAs with higher capital ratios will invest pension assets more effectively than those with lower capital.
In reality, given the lack of investable assets in Nigeria, he continued, cash alone would not positively influence PFAs’ long-term judgments regarding how to invest pension fund assets.
He asserted that the higher capital requirements on the PFAs did not guarantee better pensions in the future because the participants under the CPS assumed the investment risk.
