Pension fund operators have invested N8.51 trillion from the 12.78 trillion total pension fund assets into federal government securities, LEADERSHIP has learnt.
The N8.51 trillion is the amount invested in FG securities since the inception of the contributory pension scheme (CPS), precisely from 2004 to July 2021.
LEADERSHIP investigation showed that the pension fund operators have always preferred federal government securities over other investment options because it is easy to recoup while also giving good investment returns.
To this end, more than 70 per cent of the pension funds have so far been invested in these securities as it has allowed the federal government meets its civic responsibilities of paying salaries, fix damaged infrastructure as well as embark on capital intensive projects. This also forms the bulk of federal government local borrowing.
A breakdown of the latest data sourced from the National Pension Commission (PenCom) shows that FG bonds gulped N7.67 trillion investment; treasury bills investment was N721.74 billion; agency bond N12.91 billion; Sukuk bonds, N85.09 billion and green bonds N12.88 billion.
Similarly, the nation’s pension fund assets rose significantly to N12.78 trillion as at the end of July, 2021, by N120 billion, from the N12.66 trillion figure as at the end of June, 2021.
This means that the pension fund asset gained N470 billion having climbed from N12.31 trillion it was as at December 31, 2020, to N12.78 trillion as at July, 2021.
As at the end of March, 2021, the assets stood at N12.34trillion, hence, increasing by N320 billion between April and July, 2021.
The assets stood at N12.29 trillion in January, but dropped to N12.24 trillion in February, owing to investment loss, before it picked up in March, 2021 to the aforementioned amount.
Investment income, according to investigation, was instrumental to the continuous growth in the pension funds, despite the fact that most state governments 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.
The director general, National Pension Commission (PenCom), Mrs. Aisha Dahir-Umar, 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 number of registered contributors under the CPS has grown to 9.38 million while pension fund assets have accumulated to N12.66 trillion as at 30 June, 2021. The maintenance of a consistent growth trajectory continues to justify the commission’s overriding investment philosophy of ensuring the safety of pension fund assets.”
Dahir-Umar added that the regulator will continue to dish out policies that will enhance the growth of the pension assets as well as investment options that will ensure that the assets are not depleted.