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PFAs Invest N5.2tn of Pension Fund in FG Securities



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  • PFAs Invest N5.2tn of Pension Fund in FG Securities

Out of the total N7.52tn total pension assets as of December 31, 2017, about N5.29tn, representing 70 per cent of the entire fund, was invested in Federal Government securities by Pension Fund Administrators.

The figures are contained in the 2017 pension asset and membership data report, which was obtained by our correspondent on Tuesday from the National Bureau of Statistics.

An analysis of the report showed that while the Federal Government’s securities took a huge chunk of the pension assets, state government bonds and corporate bonds took the balance of 30 per cent.

A breakdown of the figures showed that the highest amount of N4.04tn was invested in Federal Government bonds alone.

This was followed by N1.18tn investment in Treasury Bills, while investment in Sukuk bond, green bonds and agency bonds followed with N56.55bn, N7.18bn and N5.83bn, respectively.

The N5.83bn agency bond, according to the NBS report, was invested in two government agencies. They were the Nigeria Mortgage Refinancing Company and the Federal Mortgage Bank of Nigeria.

The report read in part, “The pension asset data reflected that 7,823,911 workers are registered under the pension scheme compared to 7,710,564 in Q3 2017, while pension fund asset under management as at Q4 2017 stood at N7.51trn as against N7.16trn in Q3 2017.

“FGN bond has the highest weight percentage of 53.18 per cent of the total pension fund assets and closely followed by Treasury Bills with 15.68 per cent, and domestic ordinary shares with 8.94 per cent, while agency bonds has the least with 0.08 per cent.”

For the private sector, an analysis of the report showed that the sum of N672.23bn was invested in ordinary shares, while foreign ordinary shares had a total investment of N104.6bn.

Other security instruments where funds were invested were corporate bonds, with N262.48bn; corporate infrastructure bonds, N5.37bn; supra-national bonds, N11.43bn; and commercial papers, N55.9bn.

Similarly, the sum of N35.39bn was invested by the PFAs in foreign money market securities; N24.8bn in mutual funds; N203.3bn in real estate properties; N25.4bn in private equity fund; N6.86bn in infrastructure fund; while cash and other asset investments had N37.86bn.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and, with over a decade experience in the global financial markets.