PenCom Reviews Investment Regulations

• PenCom Reviews Investment Regulations

The National Pension Commission has reviewed the regulations of investment of pension funds.

In the reviewed regulations, PenCom stated that the Pension Fund Administrators must offer the multi-fund structure for the Retirement Savings Account and that there would be a transition period of six months, effective from the commencement date of the multi-fund structure for all PFAs to restructure their respective portfolios.

It stated, “The multi-fund structure shall comprise Fund I, Fund II, Fund III and Fund IV (retiree fund). Funds I, II, III and IV shall however differ among themselves according to their overall exposure to variable income instruments.”

The commission said the exposure to variable income instruments was defined as the sum of a PFA’s investments in ordinary shares and participation units of open close-ended and hybrid funds; real estate investment trust; infrastructure funds; and private equity funds comprising its current holdings and any future financial commitments to the acquisition of participation units in the funds.

Under the Pension Reform Act, the PFAs administer the funds, which are kept in the custody of the Pension Fund Custodians.

PenCom stated, “The requirements of the regulations are consistent with the provisions of the Pension Reform Act, 2014. The purpose of the regulations is to provide uniform rules and standards for the investment of pension fund assets.”