Within the first two months of the current year, the country’s pension fund gained N270 billion, increasing from N7.52 trillion as at December 31, 2017 to N7.779 trillion as at the end of February, 2018.
LEADERSHIP investigation shows that the pension assets rose by 2.8 per cent within two months, making the growth one of the best since the inception of the Contributory Pension Scheme (CPS).
This increase, findings show, was attributable to new pension contributions received, interest from fixed income securities and net realised on equities and mutual fund investments.
Moreover, between January and February, 2018, 390,000 workers from the public and private sectors of the economy equally joined the new pension scheme.
Confirming this while giving her opening remarks at the workshop organised by the National Pension Commission (PenCom) for Journalists in Uyo, Akwa-Ibom State, yesterday, the acting director-general, PenCom, Mrs. Aisha Dahir-Umar, said the number of pension contributors rose from 7.5 million in March, 2017 to 7.9 million as at the end of February, 2018, thus, showing 390,000 contributors joined the scheme within this period.
This, according to her, has led to rapid rise in the growth of pension fund to N7.779 trillion as at the end of February, 2018.
She stated that the commission was intensifying efforts at ensuring that the provision of necessary infrastructure for the launching of the Micro Pension Scheme in line with its strategic objective of expanding coverage of the CPS to the underserved sector.
“This is a major kernel of the strategy for expanding coverage of the contributory pension scheme. The guidelines for the Micro Pension Scheme are being finalised preparatory to the commencement of the scheme,” she stressed.
Dahir-Umar, who was represented by company’s secretary/legal adviser, PenCom, Mr. Mohammad Sanni Mohammad, added that, the commission has initiated the Pension Enhancement Programme to enhance the monthly pension of retirees in the Contributory Pension Scheme.
Noting that it was discovered that the returns being generated by the Pension Fund Administrators (PFAs) on the balances of the Retirement Savings Accounts (RSAs) of majority of retirees could be used to enhance their monthly pensions, she said, PenCom sought for and obtained the approval of the Secretary to the Government of the Federation to implement the pension enhancement.
This, she pointed out, resulted in increased monthly pensions for most retirees receiving pension under the Programmed Withdrawal arrangement, even as, the PFAs have commenced the enhancement of pensions of all retirees under Programmed Withdrawal with effect from December 2017.
Meanwhile, LEADERSHIP had earlier reported that the nation’s Total Pension Fund had risen to N7.79 trillion as at the end of February 2018, while Pension Fund operators have, however, invested N5.5 trillion translating to 70 per cent of the Pension Assets into federal government securities.
Of the N5.5 trillion invested in FGN securities, N3.9 trillion representing 50.98 per cent of the total pension Fund, was invested Federal Government bonds.
This implies that federal government has borrowed a whopping N5.5 trillion from the pension fund since the inception of the Contributory Pension Scheme (CPS) in 2004, becoming the major beneficiary of this pension pool.
Investigation shows that the money was loaned to the government by the Pension Fund Managers to fix its infrastructural deficits,and as well as meet its financial obligations as and when due.
While the money has allowed government to build new roads, repair the rail system, fix some of the power challenges, pay salaries of its workforce, among others, it has, in return, led to economic growth and development.
This means the Pension Industry has granted, as loans, 70 per cent of the pension assets to the federal government through bonds and treasury bills.
And since federal government bonds and treasury bills are less risky and gives better returns on investment, the pension operators decided to invest heavily in them, even as the new scheme has generated about N2.5 trillion as investment income from some of the investments Pension Fund Administrators (PFAs) made.
All rights reserved. This material, and other digital content on this website, may not be reproduced, published, broadcast, rewritten or redistributed in whole or in part without prior express written permission from LEADERSHIP Nigeria Newspapers. Contact: [email protected]