As more players in the private sector continue to join the Contributory Pension Scheme (CPS), the nation’s Pension Funds rose to N9.6 trillion as at the end of August 2019, LEADERSHIP can now reveal.
The Pension Assets soared significantly by about N280 billion in two months, that is, in July and August 2019, having climbed from N9.32 trillion as at June 2019, to the aforementioned figure as at the end of August 2019.
However, between August 2018 and 2019, LEADERSHIP learnt that the fund added N1.27 trillion, having grown from N8.33 trillion as at the end of August 2018 to N9.6 trillion at the end of August, this year.
This growth, which experts said, was one of, if not the highest growth rate recorded in a year, since the commencement of the new pension scheme in 2004, translates to about 11 per cent of the entire country’s pension funds.
Moreover, the funds also added more pounds of flesh between March and June, 2019, hence, stood at N9.03 trillion in March and grew to N9.32 trillion in June, 2019. This represents an increase of N294.9 billion within the space of three months, translating to 3.2 percentage growth within this period.
The consistent rise in the volume of the nation’s pension assets, according to LEADERSHIP investigation, was attributable to new pension contributions received, interest from fixed income securities and net realised on equities and mutual fund investments.
Investment income, according to LEADERSHIP investigation, was instrumental to the continuous growth in pension fund, despite the fact that government at the state and federal levels are not paying the monthly pension contributions of their workers as and when due.
Head, Corporate Communications, National Pension Commission (PenCom), Mr. Peter Aghahowa, confirmed the development at the 2019 Annual Conference of the Finance Correspondents Association of Nigeria (FICAN) in Lagos, at the weekend, stating that the fund strengthened to N9.6 trillion as at the end of August in the current year,.
He added that, the Micro Pension Plan, recently launched by President Muhammadu Buhari, would in the near future, be instrumental to significant growth in the pension assets. The micro pension plan, he said, was to ensure that the informal sector was adequately captured in the financial inclusion strategy of the federal government of which the commission keys into.
The plan, according to him, becomes necessary as the country continues its diversification plan from oil to non-oil sector, where most informal sector players reside.
Meanwhile, the acting director-general, PenCom, Mrs. Aisha Dahir-Umar, had earlier said, the CPS has been very impactful in Nigeria since the commencement of its implementation in 2004.
To this end, she added that the formation of long – term domestic capital, represented by the huge value of pension assets, belonging to over 9 million formal sector participants, was slowly, but surely, changing Nigeria’s financial landscape.
This, by extension, she stressed, is also transforming the course and pace of socio-economic development in the country.
More so, the head, Branding Committee, the Pension Fund Operators Association of Nigeria (PenOp), Mr. Wale Odutola, had at a media briefing of association in Lagos recently, said, the recent mandate given to pension fund operators by PenCom to procure a fidelity insurance policy to protect the N9.6 trillion pension funds and assets from risks associated with negligence, fraud and other vices, was part of measures to secure the future of pension contributors.
According to her, the initiative, which is in the Pension Reform Act (PRA) 2014, is an addition to the guarantee provided by banks which are the parents of the Pension Fund Custodians (PFCs).
Odutola, who is also the managing director, ARM Pensions Limited, said the mandate by PenCom to operators to have Fidelity Insurance cover for their staff attested to the efforts by the regulator and operators to ensure the funds were adequately protected.
He noted that the pension industry regulator and operators would continue to come up with new measures to steer the sector to lofty heights, adding that, ensuring a better lifestyle for contributors remains top priority of PenCom and members of PenOp.