Pension Assets Investment In FGN Securities Hits N10.19trn

The pension fund operators have invested a whopping N10.19 trillion, translating to 65.44 per cent of the nation’s pension fund assets in Federal Government of Nigeria (FGN) securities, LEADERSHIP learnt.

This is even as the nation’s pension assets rose to N15.58 trillion as at the end of March 2023.

In an unaudited report on the performance of pension assets for the period ended 31, March 2023, released by the National Pension Commission(PenCom), which was assessed by LEADERSHIP yesterday, the breakdown of the N10.19 trillion investment in FGN securities shows that, N9.78 trillion was invested in FGN bonds; N185.51 billion in treasury bills; N11.28 billion in agency bonds; N157.34 billion in Sukuk and N58.10 billion in green bonds.

Similarly, state governments’ securities attracted N162.19 billion; corporate debt securities amounted to N1.69 trillion and money market instruments gulped N1.75 trillion.

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With the growth of the assets to N15.58 trillion, it means the Fund grew by N132.45 billion in March, even as LEADERSHIP investigation had earlier shown that the fund assets rose by N450 Billion within January and February, 2023, having grew from N14.99 trillion in December 2022 to N15.44 trillion as at the end of February, 2023.

Pension fund operators have seen FGN securities as a secured investment window as they were cautious on where to invest the huge pension assets in, that will not go bad and will bring the needed investment returns.

Although bond yields have subsided in recent times owing to the lull in that market, FGN bonds and securities are still regarded as a secured investment window by operators who continued to invest heavily in this instrument.

Investment income, according to LEADERSHIP investigation, was instrumental to the continuous growth in pension funds, despite the fact that some governments at majorly, State level are not paying the monthly pension contributions of their workers as and when due.

Similarly, the huge increase, according to findings, was attributed to new pension contributions received, interest from fixed income securities and net realised on equities and mutual fund investments.

Reacting on this development, the managing director/CEO of APT Securities and Funds Limited, Mallam Garba Kurfi, had said, investment in FGN Bonds by Pension Fund Administrators (PFAs) is necessary because of its low risk, higher yield and availability when compared with the other investments.

While calling for more financial products that are less risky and  can give alternative higher yield to Bonds in the financial markets, this, he added, is needed to attract pension funds investments.

Earlier, director general, National Pension Commission(PenCom), Mrs. Aisha Dahir-Umar, had said, the growth in the pension fund assets under the new pension scheme, is an indication of prudent and sincere management of the pension fund by the pension operators and the regulator.

According to her, “the maintenance of a consistent growth trajectory continues to justify the Commission’s overriding investment philosophy of ensuring the safety of pension fund assets.”

The executive secretary/CEO, Pension Fund Operators Association of Nigeria (PenOp), Mr. Oguche Aguda, while applauding the contributions of pension fund operators toward growing the assets, assured pension contributors that their funds are in safe hands, attesting to the fact that, there has been no reported mismanagement of pension fund under the new scheme known as Contributory Pension Scheme(CPS), a development, he said, was due to prudent management of the assets by operators and strict enforcement of pension regulations by PenCom.