PenCom Defends Pension Investments In Tier-1 Banks, Says Safeguards Intact

…Police Yet to Exit Contributory Pension Scheme

The National Pension Commission (PenCom) has defended its decision to allow Pension Fund Administrators (PFAs) to invest in the parent companies of their custodians, insisting that adequate safeguards are in place to protect contributors’ funds.

PenCom director-general, Omolola Oloworaran, also clarified that the Nigeria Police Force has not exited the Contributory Pension Scheme (CPS), saying discussions are ongoing to improve police retirement benefits rather than facilitate their withdrawal from the scheme.

Speaking on Tuesday during the Meet the Press Briefing at the Presidential Villa, Abuja, Oloworaran said the Commission’s decision to relax the investment restriction followed a comprehensive risk assessment that found minimal conflict of interest.

She explained that under PenCom’s investment regulations, PFAs are only permitted to invest pension assets in carefully selected instruments that meet stringent criteria, including profitability, strong credit ratings and proven track records.

According to her, the Commission regularly reviews its investment regulations, conducts routine examinations and spot checks on PFAs to ensure strict compliance with established risk management guidelines.

“PFAs cannot just go into the stock market and buy any kind of stock. There are strict guidelines. Companies must demonstrate profitability, have a proven track record and satisfy other criteria before pension funds can invest,” she said.

Oloworaran noted that each PFA also operates under the oversight of a board, an investment committee and a risk management committee, providing additional layers of governance to safeguard contributors’ funds.

She said PenCom recently issued a circular allowing PFAs to invest in the parent companies of their custodians after determining that the potential conflict of interest was negligible.

The PenCom boss explained that the parent companies involved are largely Tier-1 banks, including First Bank, United Bank for Africa (UBA) and Zenith Bank, which she described as A-rated institutions with strong financial foundations.

She said the policy was intended to widen investment opportunities for pension funds without compromising safety.

Using Stanbic IBTC as an example, Oloworaran explained that if its custodian is Zenith Bank, the previous restriction prevented the pension administrator from investing in Zenith Bank shares despite the bank’s strong performance.

“We reviewed the risks and any potential conflict of interest and found the risks to be very low. That is why we opened that investment window,” she said.

On concerns over the Nigeria Police Force’s planned withdrawal from the Contributory Pension Scheme, Oloworaran dismissed reports suggesting the force had exited the scheme.

She explained that the police remain under the CPS but have expressed dissatisfaction with the level of retirement benefits they receive compared to those of their counterparts in the military.

“The police have not exited the Contributory Pension Scheme. They are still within the scheme. What they want is improved retirement benefits,” she said.

According to her, PenCom has engaged with police authorities and shares their desire to improve welfare.

She said the Commission was working with relevant government authorities to review police retirement benefits, stressing that improving pensions remains the priority regardless of whether the officers remain within the CPS.

“We support anything that puts more money in the pockets of ordinary Nigerians. What they really want is improved benefits, and that is what we are working towards,” she added.

Oloworaran also dismissed reports of widespread delays in pension payments, saying that retirees with complete documentation receive their entitlements without undue delay.

She disclosed that PenCom actively monitors complaints on social media and promptly follows up on reported cases.

“If anyone is aware of retirees experiencing delays, they should refer them to us. As I sit here today, I am not aware of any outstanding cases,” she said.

She further revealed that the Commission is implementing a Customer Relationship Management (CRM) system to improve the handling of pension-related complaints nationwide.

The PenCom DG also highlighted ongoing efforts to expand pension coverage to workers in the informal sector through digitised enrolment and the licensing of Accredited Pension Agents, expressing optimism that the initiative would begin delivering measurable results within the next two years.