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Regulators Move to Implement New Pension Guidelines



pension fund
  • Regulators Move to Implement New Pension Guidelines

Regulators of the Contributory Pension Scheme in Lagos State and federal level are working together to implement new guidelines that have been introduced since the amended of the Pension Reform Act in 2014, investigation has revealed.

After the amendment of the Pension Reform Act in 2014, the National Pension Commission introduced some draft and new guidelines to enforce sections in the country’ statutory pension laws.

The Lagos State Government, in an early lead in adopting the CPS compared to other states of the federation, is also amending its pension laws to align with the provisions of the PRA 2014.

Some of the drafts and guidelines released by PenCom in recent years are the multi-fund structure, pension enhancement for retirees on programmed withdrawal, harmonisation of pension entitlements, access to the RSA (the mortgage option), and minimum pension guarantee.

The Director-General, Lagos State Pension Commission, Mrs. Folashade Onanuga, said it was cogent to update officials of government in charge of pension matters on innovations in the PRA 2014.

During a seminar on update on the CPS in Lagos, she said the contributory pensions that Lagos State subscribed to was not an isolated scheme, but a programme that was introduced by the Federal Government, with PenCom as the regulator.

According to her, PenCom is the national regulator of the CPS while LASPEC is the Lagos state’s regulator.

Onanuga said, “We also need to have a feel of the innovations coming from PenCom to exchange ideas as state regulators. We understand that everything Lagos State tries to do is to benefit the workers and we need to do this within the confines of the CPS.”

The director-general said the state was also sensitising the parastatals and agents of government to the need to comply with the Group Life Insurance Policy.

Fund structure

While speaking on one of the guidelines, an official of PenCom, Mr. Babatunde Philips, said that in 2017, PenCom released the amended regulation on investment of pension fund assets.

He said the new investment guidelines introduced a multi-fund structure, which replaced the former structure that put all active contributors into one Retirement Savings Account fund without consideration for age or risk profiles of such contributors.

Under the new structure, he explained that all the PFAs would be offered the multi-fund structure for the RSA comprising four funds and differed based on overall exposure to variable income instruments, and that the different funds would be made to fit the ages and risk profiles of contributors.

“The fund types include Fund I, which is for young contributors based on choice; Fund II for young and middle-aged contributors (ages 49 years and below); Fund III: for pre-retirees (ages 50 years and above) and Fund IV for retirees,” he said.

Pension enhancement

After much clamouring for enhancement of pensions under the CPS, Philips said that PenCom addressed this following the appreciable growth in the RSAs of retirees.

He said the commission developed a framework to set out the modalities for enhancement of the pensions of retirees on the PW under the CPS based on surpluses generated from return on investment on retirees’ funds.

Harmonisation of pension entitlements

Section 173 (1) of the 1999 Constitution (as amended) provides that “the right of a pension in the public service of the federation to receive pension or gratuity shall be regulated by law” – the law in the case of the CPS is the PRA 2014.

Section 173 (3) of 1999 Constitution (as amended) provides that “pensions shall be reviewed every five years or together with any federal civil servants’ salary reviews, whichever is earlier” for the Defined Benefit (old) Pension scheme.

According to PenCom, the pension enhancement framework in line with one of the objectives of the PRA 2014 seeks to harmonise the pension rights of retirees in both the private sector as well as in the public sector of the federal, state and local governments in Nigeria.

Residential mortgage option

Section 89 (2) 0f the PRA 2014 provides that a PFA may, subject to guidelines issued by PenCom, apply a percentage of pension fund assets in the RSA towards payment of equity contribution for payment of residential mortgage by a holder of the RSA.

The main objective of section 89 (2) is to facilitate access by the RSA holders to residential mortgages as well as stimulate the housing/mortgage finance sector.

According to PenCom, the proposed establishment of a mortgage guarantee company by the Federal Government through the Central Bank of Nigeria will enable an RSA holder to obtain a mortgage loan based on a mortgage guarantee issued by the MGC and secured by a portion of the workers’ RSA balance.

Minimum pension

Section 84 (1) of the PRA 2014 provides that all RSA holders who have contributed to a licenced PFA for a number of years to be specified by the commission shall be entitled to a guaranteed minimum pension as may be specified from time to time by the commission.

PenCom stated that the GMP is the lowest benchmark of pension which an eligible retiree under the CPS receives as minimum pension.

“It is an absolute amount which is equivalent to a certain percentage (to be determined by the commission from time to time) of the national minimum wage,” it stated.

According to the commission, the MPG will cover the RSA holders who contribute and retire under the CPS.

It stated that retirees solely on the PW whose RSA balances could only provide a stream of incomes lower than the GMP at the point of retirement and whose RSA balances at the point of retirement could provide a stream of incomes equal or higher than the GMP would benefit from it.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq,, Investorplace, and many more. He has over two decades of experience in global financial markets.

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MicroStrategy Rally Crushes Short Sellers, Wiping Out $1.92 Billion



MicroStrategy- Investors King

Short sellers betting against MicroStrategy found themselves facing significant losses as the company’s rally wiped out $1.92 billion since March.

This development comes amidst a rally that has seen MicroStrategy’s stock outperform bitcoin, causing a considerable hit to those who had taken a bearish stance on the tech firm.

According to data from S3 Partners, short sellers have been on the losing end since March, as MicroStrategy’s stock surged, highlighting the impact of the rally on those betting against the company’s success.

This loss underscores the challenges faced by short sellers in a market where certain stocks experience rapid and unexpected price increases.

The rally in MicroStrategy’s stock is attributed to several factors, including the approval of several spot bitcoin exchange-traded funds (ETFs) by the Securities and Exchange Commission (SEC) earlier in the year.

This move by the SEC brought bitcoin, a once-nascent asset class, closer to the mainstream and fueled investor interest in companies like MicroStrategy, known for their significant holdings of the cryptocurrency.

MicroStrategy, which held nearly 190,000 bitcoin on its balance sheet as of the end of 2023, has indicated its intention to continue increasing its exposure to the digital currency.

The company’s decision to sell convertible debt to raise money for additional bitcoin purchases further bolstered investor confidence and contributed to the stock’s rally.

Analysts at BTIG noted that the premium for MicroStrategy’s stock reflects investors’ desire to gain exposure to bitcoin indirectly, especially those who may not have the means to invest directly in the cryptocurrency or ETFs.

The company’s ability to raise capital for bitcoin purchases is seen as a positive sign for shareholders, adding to the optimism surrounding its stock.

However, despite the recent rally and optimism surrounding MicroStrategy, the crypto industry as a whole continues to be heavily shorted.

Short interest in nine of the most-watched companies in the crypto space remains high, standing at 16.73% of the total number of outstanding shares, more than three times the average in the United States.

Moreover, concerns persist regarding the SEC’s stance on cryptocurrencies, with some experts suggesting that the approval of spot bitcoin ETFs may not necessarily indicate a broader acceptance of other similar products, such as spot ethereum ETFs.

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Geregu Power Plc Announces N14.46bn Profit in Q1 2024



Geregu Power Plc

Geregu Power Plc has announced a profit of N14.46 billion for the first quarter (Q1) of 2024.

This represents a 307% increase when compared to the same period last year.

The power-generating company, known for its pivotal role in Nigeria’s energy sector, disclosed its outstanding financial results in its interim financial statement filed with the Nigerian Exchange Limited on Tuesday.

This disclosure comes shortly after the firm’s Deputy Chief Executive, Julius Omodayo-Owotuga, hinted at the promising financial outlook during the company’s recent annual general meeting held in Lagos.

According to the interim report, Geregu Power Plc’s revenue surged to N50.42 billion in the first quarter of 2024, representing an increase of 254.37% year-on-year appreciation.

The company’s net finance income transitioned from a negative position to N133.61 million. This positive momentum was supported by a moderation in finance costs, which decreased from N3.141 billion to N2.29 billion as of March 2024.

Speaking to stakeholders at the recent annual general meeting, Femi Otedola, Chairman of Geregu Power, expressed satisfaction with the company’s exceptional financial performance in 2023.

Otedola highlighted the board’s decision to propose a dividend distribution of N8 per share for the 2023 financial year as a testament to their commitment to rewarding shareholders and confidence in the company’s future prospects.

The robust financial results for the first quarter of 2024 further solidify Geregu Power’s position as a leading player in Nigeria’s energy landscape.

The company’s commitment to operational excellence, strategic investments, and adherence to international standards, such as obtaining ISO 9001 and 14001 certifications from the Standard Organisation of Nigeria, underscores its dedication to driving sustainable growth and value creation.

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Guaranty Trust Holding Company Plc Records N609.3bn Profit Before Tax in 2023



GTCO Commemorates Listing on Nigerian Exchange - Investors King

Guaranty Trust Holding Company Plc (GTCO) has announced a strong profit before tax (PBT) of N609.3 billion for the 2023 financial year.

This represents an increase of 184.5 percent when compared to the previous year.

The audited consolidated and separate financial statements filed with the Nigerian Exchange Group and London Stock Exchange on Monday revealed market capitalization exceeded N1 trillion on the NGX to further solidify GTCO’s position as one of the top financial holding companies in Nigeria.

During the period under review, the group’s post-tax profit rose by 218.99 percent to N539.65 billion from N169.17 billion in 2022.

Key indicators such as loans and advances increased by 31.5 percent to N2.48 trillion, while deposits grew by 63.7 percent to N7.55 trillion.

The group’s total assets and shareholders’ funds closed at N9.7 trillion and N1.5 trillion, respectively.

Despite the challenging economic environment, GTCO maintained a strong capital adequacy ratio of 21.9 percent.

Also, the group sustained asset quality, with IFRS 9 Stage 3 loans improving to 4.2 percent in December 2023 from 5.2 percent in the same period of the prior year.

However, the cost of risk experienced an uptick, rising to 4.5 percent from 0.6 percent in December 2022, largely due to worsening macroeconomic factors.

Despite these challenges, GTCO’s pre-tax return on equity stood at 50.6 percent, while pre-tax return on assets was 7.6 percent. The cost-to-income ratio remained favorable at 29.1 percent.

Commenting on the financial results, Mr. Segun Agbaje, the Group Chief Executive Officer of GTCO, expressed satisfaction with the company’s performance amidst a challenging operating environment.

He attributed the strong performance to the successful implementation of the group’s business model across banking and non-banking business verticals.

“Also important to our success is our relentless obsession with innovation and offering great customer experiences as demonstrated by the successful redesign and upgrade of our mobile banking application, GTWorld,” he stated.

“In a landscape characterised by evolving regulatory reforms, global uncertainties, and heightened competition, we have continued to leverage our inherent strengths and capabilities to unlock significant value, creating more opportunities for the businesses and individuals we serve.

In line with its commitment to shareholders, GTCO announced a final dividend of N2.70k, bringing the total dividend for 2023 to N3.20k.

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