PFAs Invest N4.2bn Pension Funds in Infrastructure

• PFAs Invest N4.2bn Pension Funds in Infrastructure

Pension Fund Administrators have gradually increased the amount of funds invested in infrastructure under the Contributory Pension Scheme to N4.2bn.

Figures obtained from the National Pension Commission on Tuesday showed that this translated to 0.07 per cent of the total funds under the scheme, which rose to N6.49tn as of April this year.

According to PenCom, in May 2015, the operators invested N568m in infrastructure for the first time, and increased it to N1.82bn in September 2016.

Some operators who spoke with our correspondent said that investors had continued to mount pressure on them to part with the funds in their custody.

The operators, who noted that the funds were not lying idle, said they had been invested in different portfolios such as the FGN bonds, treasury bills, domestic ordinary shares, local money market securities, corporate debt securities, real estate properties, state government securities, foreign domestic shares and cash/other assets.

In May, PenCom reviewed the regulation of its investment guidelines and stated that the PFAs must offer the multi-fund structure for the Retirement Savings Account and that there would be a transition period of six months.

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 the 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.

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

The Chairman, Pension Fund Operators Association of Nigeria, Mr. Eguarehide Longe, said the pension fund was making notable impact on the society.

“The investment guidelines are broad and comprehensive enough to include assets that will make notable societal impact,” he said.

Longe explained that the PFAs could be more adventurous in the asset classes they reviewed, developed and invested in, adding that the CPS provided a positive opportunity over the long haul to improve the general wealth of the country.