By ZAKA KHALIQ, Lagos –
The nation’s pension assets gained a whopping N1.2 trillion in the last 12 months, shooting up the pension funds from N6.1 trillion in December 2016 to N7.3 trillion as at the end of November 2017, LEADERSHIP findings has revealed.
This means that the pension fund grew by 16 per cent in the last one year, a growth that has been applauded by market observers.
From N6.1trillion the pension assets stood at in December 2016, it soared to N6.25 trillion in January 2017, moved to N6.29 trillion in February, leaped to N6.41 trillion in March and grew to N6.49 trillion in April 2017.
By May 2017, the pension assets had risen to N6.72 trillion; it jumped to N6.83 trillion in June, soared to N6.94 trillion in July, increased to N7.09 trillion in August, and in September, it stood at N7.16 trillion.
LEADERSHIP checks revealed that the pension fund rose to N7.2 trillion in October, moving up to N7.3 trillion at the end of November this year.
It was gathered that between April and June this year, there were 97,713 Retirement Savings Account (RSA) holders registered under the new pension scheme, with 77, 023 contributors from the private sector, 9,148 workers from the federal government registered under the CPS, while state governments recorded 11,542 contributors.
This increased the total number of pension contributors from inception of the scheme till date to 7.6 million.
Between April and June 2017, the pension fund gained about N7.5 billion, with private sector adding N4.1 billion to the pension pool and states contributing N1.5 billion, even as federal government added N1.8 billion to the pension funds.
The fund is growing despite the fact that federal government has accumulated over N200 billion pension arrears under the Defined Benefit Scheme (DBS) and Contributory Pension Scheme (CPS).
Also, most states as well as some companies in the private sector are still defaulting in remittances to RSAs of their workers.
The reason for the constant growth in pension assets, LEADERSHIP learnt, is not unconnected to the fact that pension contributions are made on a monthly basis to the RSAs of employees, while the Pension Fund Administrators (PFAs) also make a lot of profits from investment of these funds into federal government bonds, stock market and other less risky investment windows, which also goes into the pension funds pool.
Moreover, with some states now ready to join the CPS, as well as federal government’s readiness to settle some of its arrears, and the National Pension Commission (PenCom) going after defaulting employers, experts said these indicators will continue to push the fund even beyond the current figure.
The sum of N54 billion released by the federal government earlier in the year to offset some of its pension arrears is said to be partly responsible for the continuous increase in pension assets.
The consistent increase in the volume of pension funds has allowed pension fund operators invest more in the nation’s economy, while accruing about N2.5 trillion as income from the investment of the pension assets.
In an interview with LEADERSHIP, the director, Centre for Pension Right Advocacy, Mr. Ivor Takor, said most of the PFAs are making money from investment of the pension funds and that some of the profits also goes back into the fund, which increases its volume.
Takor who is also a former board member of PenCom, however, appealed to the federal government and states to pay their respective pension arrears, as this will go a long way to redeem the lost image of the new pension scheme recently criticized for various reasons, among which is the multitude of arrears owed, just like what was happening in the old scheme.
He applauded the steps taken by PenCom to partner the Economic and Financial Crimes Commission (EFCC) as well as other relevant agencies to prosecute defaulting employers, saying this will also ensure more compliance in the private sector and make sure the fund keeps growing from time to time.
Also speaking, executive director, Crusader Sterling Pension, Mr. Conrad Ifode said the investment income from pension assets was regarded as a key factor that keeps the fund growing at an acceptable rate, as the pension assets now has about N2.5 trillion as income from investment of the assets.