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Multi-Fund Structure To Align Risk, Return Expectations On N8trn Pension Assets



The National Pension Commission (PenCom) has said that the purpose of the recent commencement of multi-fund structure on N8trillion pension assets was meant to align risk with return expectations in the investment of the pension funds.

The commission also disclosed that this will ensure better matching of pension assets, liabilities and diversification of pension fund portfolios, as minimum limits are set for aggregate investments in variable income securities for each Fund.

Speaking at a forum in Uyo, Akwa Ibom State recently, Ibrahim Shehu Kangiwa of the Investment Supervision Department of PenCom, explained that the introduction of the Multi-Fund investment structure for Retirement Savings Account (RSA) Funds would address the varying risk appetite of contributors, as the different Funds are tailored to fit the ages and risk profiles of contributors. 

According to him, expanding the scope of allowable investment instruments and Fund classes available to contributors would also improve returns on pension funds, as minimal limits have been set for variable income instruments which generally yield higher returns over a given period.

The RSA Fund has been sub-divided into 4 Funds, namely, Fund I, Fund II, Fund III and Fund IV, to cater for the different age groups of contributors, including retirees under the Contributory Pension Scheme (CPS).

Speaking on the Pension Multi-Fund structure which commenced earlier in the month, managing director/CEO, IEI-Anchor Pensions, Mr. Glory Etaduovie, said his company has raised awareness among its clients to better inform them on the benefits of this scheme. 

He also said that the new structure will give room for more funds to be invested in infrastructure  that is critical to economic development, noting that it will also lead to increased pension assets, now at over N8 trillion through better returns on investment of pension funds.

Believing that this will provide the base for long term funding for critical national projects, he said this will also ensure that pension contributors had more money in their RSA at retirement.





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