Pension Sub-sector Records N770bn Profit in 10 years

The pension industry has recorded N770 billion profit in the past ten years, the Director General, National Pension Commission (PenCom), Mrs. Chinelo Anohu-Amazu has said.

Anohu-Amazu, who disclosed this at the 17th annual lecture of the Catholic Brothers United (CBU ) of St. Agnes Catholic Church Maryland, Lagos, said the pension industry, raked in the huge profit between January 2006 and June 2016.

She said total contributions to Retirement Savings Account (RSA) for both public and private sectors within the period was N3.06trillion made up of N1.78trillion from public sector, which represents 57.52 percent of the total contributions and N1.30trillion from the private sector, representing 42.48 percent of the total contributions.

“Given that total assets of the RSA fund was N3.83trillionas at the period under review, it showed that a profit of over 770billion was made between January 2006 and June 2016.The public sector contributions include all contributions from federal and state governments as well as the self -funding agencies”, the PenCom boss explained.

She observed that the Nigerian pension fund assets had seen a dramatic growth over the decade from about N2trillion deficit in June, 2004 to N5.74 trillion as at the second quarter 2014.

According to her, this pool of funds is being invested on behalf of the contributors based on the provision of the PRA 2014 on stipulated allowable instruments for investment of pension funds and assets.

She said the commission, had in line with its regulatory responsibilities, issued regulation on investment of pension asset to guide the operators on how pension contributions should be invested.

The PenCom DG stated that the investment policy of the industry is based on the principle of safety, fair returns and liquidity to ensure that retirees receive their benefits as and when due, while achieving measurable impact on the economy.

According to Anohu-Amazu, Nigeria, like other emerging economies, had invested over 69 percent of the pension funds in government securities while investment in equities and money market securities were moderate at 11.54 percent and 8.66 percent respectively as at the second quarter of 2016.

Speaking on infrastructural investment, Anohu-Amazu, said there was only 0.03 per cent investment in infrastructure, a situation, which she said has left a huge untapped financing prospect.

“In addition, there is no investment in infrastructure bonds despite the allowance of 15 percent of the total pension fund asset in this instrument. This was largely due to non availability of this instrument in the market.” she stated.

She said the corporate and the pension industry strategies would help to increase investment in infrastructure and other alternatives assets from four percent in 2014 to 40 percent by the end of 2019.

Furthermore, she said plans have been made to drive efficiency by improving service delivery and the use of technology as well as establishment of share services across the pension industry.

She disclosed that Nigerian pension fund is targeting at inclusive expansive coverage, with the objective of ensuring that a minimum of 18per cent of the population, are covered and increase the asset size of the sector increased by at least 10 percent of the Nigerian GDP by 2019.

The commission, she added, will drive these objectives through excellence in service delivery access to the pension industry and increased investments in infrastructure projects to achieve measurable impact on the Nigerian economy.