How PenCom invested N130bn pension fund in infrastructure

Bisola David
Bisola David
How PenCom invested N130bn pension fund in infrastructure

Pension Fund Administrators invested N130.18 billion in infrastructure through the Contributory Pension Scheme as of September 30, 2023.

The Punch reported that statistics from the National Pension Commission’s “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)” were made public.

The data indicates that as of the review period, total assets under the CPS were N17.35 trillion.

A portion of the funds were also allocated to investments in money market instruments, securities issued by the federal and state governments, and ordinary shares of both local and foreign companies.

The commission had outlined the requirements for investing the money in accordance with the rules of the 2014 Pension Reform Act in its updated investment regulation.

It stated that the regulation’s goal was to provide consistent guidelines and criteria for pension fund asset investments.

Pension fund custodians are required by regulation to accept written instructions only from licenced PFAs about the PFAs’ management and investment of assets held in the PFCs’ custody on behalf of the contributors.

It stated that the PFCs could not contract out the custody of pension fund assets to third parties, with the exception of permitted investments made outside of Nigeria, while performing their contractual obligations to PFAs.

It stated, “Before engaging a global custodian for such allowable foreign investments, the PFC shall obtain prior approval from the commission.”

The legislation states that PFAs may not contract out the management or investment of pension fund assets to outside parties while carrying out their contractual obligations to contributors, with the exception of open-end, closed-end, hybrid, and specialised investment funds as permitted by the regulation.

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