Infrastructure Dev Gulps N130bn Pension Funds In Nigeria – PenCom

BY EDMOND ODOK – Nigeria’s Infrastructure development has so far gulped over N130.18 billion in terms of funds invested by Pension Fund Administrators from the Contributory Pension Scheme (CPS) as of the end of September 2023, according to the National Pension Commission (PenCom).

This is the figure obtained from the Commission on “Unaudited report on pension funds industry portfolio for the period ended 30 September 2023 Approved Existing Schemes, Closed Pension Fund Administrators and RSA Funds (Including unremitted contributions @CBN & legacy funds”.

The figures also indicate that total assets under the CPS stood at N17.35tn during the period under review with part of the funds invested in domestic and foreign ordinary shares, federal and state governments’ securities, as well as money market instruments among others.

In its amended investment regulation, the Commission further highlighted the requirements for investing the funds in line with the provisions of the Pension Reform Act of 2014, saying the purpose of the regulation was to provide uniform rules and standards for the investment of pension fund assets.

The regulation stipulates that Pension Fund Custodians (PFCs) must only take written instructions from licensed PFAs concerning the PFAs’ investment and management of pension fund assets held in their custody on behalf of the contributors, adding that in discharging their contractual functions to PFAs, the PFCs must not contract out the custody of pension fund assets to third parties except for allowable investments made outside Nigeria.

Further demanding that; “The PFC shall obtain prior approval from the commission before engaging a global custodian for such allowable foreign investments”, the regulation also said the PFAs, in discharging their contractual functions to contributors, cannot “contract out the investment/management of pension fund assets to third parties except for open/close-end/hybrid funds and specialist investment funds allowed by the regulation.”