A report from the National Pension Commission (PenCom) has it that pension fund operators have invested N151.95 billion of the increasing pension funds under the Contributory Pension Scheme in State Governments’ securities.
The N151.95 billion which was invested as of the end of the second quarter of 2018, amounted to 1.8% of the total pension funds. The 1.8% stood at N8.23 trillion in the period under review.
The commission barred the pension operators from investing the increasing funds in state government’s securities that had yet to comply with the Contributory Pension Scheme.
According to the commission, 27 states have enacted laws on the CPS, while eight states are at the bill stage. One state, however, has yet to commence the process of enacting the law on the CPS.
The commission noted that 12 out of the 36 states had commenced remittance of contributions into the RSAs of their employees, while eight states had commenced the funding of their Retirement Benefit Bond Redemption Fund Accounts.
PenCom also revealed that the operators had invested a substantial part of the pension funds in the Federal Government’s bonds and treasury bills.
The commission’s report stated that some of the monies were invested in agency bonds, supra-national bonds, commercial papers, foreign money market securities, and open/closed-end funds.
Other investment portfolios where the operators invested the funds are real estate investment trusts, private equity funds, infrastructure funds, cash and other assets.
The acting Director-General, PenCom, Aisha Dahir-Umar, said the pension funds had improved the savings culture of workers and constituted a pool for investment.
According to her, the sector contributed about 6.54 per cent to the country’s gross domestic product as of March.
Dahir-Umar added that the fund had provided capital that further deepened the financial markets.
Nairametrics had earlier reported RSA and Retiree fund ranking for August 2018.
Of the 19 RSA pension funds, 8 of them ended the month in the red with Sigma RSA pension fund losing the month with a negative 1.02% return.
All but one Retiree fund, on the other hand, posted positive returns for the month with Investment One Retiree fund being the only one that recorded a negative performance return of 0.64%.