As investment in FGN securities hits N7trn
BY EDMOND ODOK, ABUJA – Despite global economic shocks arising from COVID-19 pandemic and falling oil prices in the global market, Nigeria’s pension funds investment in Federal Government Bonds and Treasury Bills is now over N7 trillion and still growing.
This is as the sector regulatory body, National Pension Commission (PenCom), has put current pension contributions in the country at over N11 trillion as at the second quarter of 2020.
By the Commission’s second quarter report published on its official website, of this amount, the over N7 trillion funds’ investments are in FGN Securities and related market instruments.
The reports, which offered details of happenings in the pension industry, said based on unaudited valuation, total worth of pension fund assets increased to N11.09 trillion in June 2020, from the March 2020 figure of N10.33 trillion. This figure represents a growth rate of 7.36 per cent recorded within the period under review.
Also attributing the growth to market valuation of quoted equities, PenCom disclosed that the list of contributors went up by 41,074 to 9,097,803 nationwide from the official records in the first quarter of 2020.
The Commission explained that the industry contributors’ growth is driven by the Retirement Savings Account (RSA) Scheme, which witnessed 41,147 new additions.
Similarly, the reports stated that a total of N2.56 billion was paid out to Pension Fund Contributors, who have so far lost their jobs but still under the age of 50.
It said the arrangement is in line with the Pension Reforms Act 2014, which allows contributors to withdraw 25 per cent of their savings if they lose their jobs and have not found any replacement in about four (4) months.
Available statistics also showed that about 4,688 Retirement Savings Account (RSA) holders were disengaged from work but unable to secure another job within four (4) months of disengagement during the second quarter.
And beneficiaries of these payments include former public and private sectors employees with the private-sector recording a massive 4,263 RSA holders
Additionally, a total of N4.31 billion was approved for payment to about 8,221 RSA holders in the first quarter, just as the Commission disclosed that about N5.28 billion was paid to 10,673 RSA holders in the second quarter of 2020.
Furthermore, the reports said 25 per cent withdrawal from RSA represents a lifeline for job seekers who need money to survive as they continue searching for alternative sources of income generation.
Aside the 25 per cent withdrawal, the Commission explained that beneficiaries are thereafter paid the balance as their pension on a monthly basis.
The combination of global economic downturn and COVID-19 pandemic have seen many Nigerians suffering massive job losses in all sectors of the economy.
Going by available statistics, since year 2019 when oil prices began plummeting at the international market, Nigeria’s, like most economies globally, has been under pressure with mounting fears of possible recession across the world.
