Investors are finding it difficult to access accumulated pension funds in excess of N5.3 trillion due to inability to meet criteria in the investment guidelines. This was revealed in an investigation by Financial Vanguard, which showed that Pension Fund Administrators (PFAs) in charge of channeling the fund into qualified investment vehicles are yet to see any credible investment vehicle from Nigerians.
One of the reasons why government bodies, state governments and investors have not been able to access the funds despite the fact that they clamour for the funds to be invested in infrastructure is that they have not been able to come up with an infrastructure bond as the guideline stipulates.
Mr. Babatunde Fashola recently approached pension operators to see if part of the fund could be channeled into infrastructure but was told that even the Federal Government must meet the criteria in the guidelines.
National Pension Commission, (PenCom) ensures that interested investors abide strictly by the law. PenCom ensures that in the case of infrastructural investment, there must be a competitive bidding process for any contract, the bidders must be qualified to carry out the contract, there must be a time limit for completion of the contract, there must be a monitoring team to monitor the progress or otherwise of the contract, there must be experts to ascertain that the quality of products the investors purport to buy are up to standard.
Director-General of PenCom, Mrs. Chinelo Anohu-Amazu said, “I have always been a proponent of investment in infrastructure for a simple reason that this is one investment if handled properly would benefit both the contributors and retirees alike. The Federal Government bonds are safe but it is not something you can see and feel like infrastructure.
“When we were doing this reform in 2001/02, we were in Mexico and had gone to other South American countries where they have implemented the contributory system. We were going down a road and what we saw on the signboard on the road was ‘contributory pension fund.’ This is the kind of thing we want to see in Nigeria. Ten years down the line there is no such signboard in Nigeria and the funds are growing. Who will use the roads?
“The reason for the criteria in the guideline is to make sure that the funds are safeguarded, shrouded from the vagaries of human discrepancies and all. Countries like Singapore and Canada have utilized their pension funds effectively for their citizens. It is not something that is outlandish; the key thing is: How did that utilisation happen?
“Why are Nigerians not meeting the guidelines? What is preventing those who are looking to build things for the community from meeting the guidelines? What is preventing you from having access to the pension fund?” Anohu-Amazu queried.
“If the PFAs per chance invest in something they ought not to have invested in, it would read on its raider that instant and they have two options, either to rescind the transaction or we will take our license back, very simple. Now if we haven’t seen a lot of investment in infrastructure it is because a lot of people have not met the guidelines,” she said.
The oversight functions of Pencom, has made it difficult for those without a proper plan to access funds, as Pencom stated that most Nigerians who come forward are only looking for quick gains, and it is its responsibility to ensure that pensioners money are not wasted on unrealistic projects.
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