The Minister of Finance, Wale Edun, has refuted allegations that the federal government intends to use N20 trillion from the Pension Fund for infrastructure projects, stating that the government will comply with the established rules and regulations governing these funds.
In a statement made in Abuja on Thursday, Edun noted that the pension industry, similar to other sectors in the financial industry, is strictly regulated by specific legal frameworks.
Consequently, he said that the federal government does not plan to surpass these legal boundaries, emphasizing that the government is committed to protecting workers’ pensions.
Recall on Wednesday, there was significant public backlash after the federal government announced plans to use the N20 trillion in workers’ pension funds for infrastructure projects.
Responding to the public outrage, Edun said:
“It has come to my notice that there are stories making around that the federal government plans to illegally access the hard-earned savings and pension contributions of workers. Nothing could be farther from the truth.
“The pension industry, like most the financial industries, is highly regulated. There are rules. There are limitations about what pension money can be invested in and what it cannot be invested in.
“The federal government has no intention whatsoever to go beyond those limitations and go outside those bounds which are there to safeguard the pensions of workers.
“What was announced to the federal executive council was that there was an ongoing initiative drawing in all the major stakeholders in the long-term saving industry, those that handle funds that are available over a long period to see how, within the regulations and the laws, these funds could be used maximally to drive investment in key growth areas,” Edun said.
Ongoing Conversation in the Financial Industry
In addition, the Minister said the recommendation to “unlock” the some of the latent funds in the country such as pension funds is only an ongoing conversation in the financial sector among “best and brightest”.
He said the conversation revolves around exploring avenues for funding that will lead to growth, creation of job and alleviation of poverty.
Moreover, Edun said the government has no attempt to increase the risk of the pension funds nor allow their investment to be less safe.
“Investments such as infrastructure, housing etc, and of course, to find a way to provide Nigerians with avoidable mortgages. Within this context, there is no consideration to provide less safe investment for pension funds, or insurance funds or any investment fund that are made available.
“No attempt to increase the risk, or lower the return that will otherwise be had.
“And we must remember that the federal government possesses the ability to provide guarantees where such are needed in order to unlock funding that will lead to growth, creation of job and alleviation of poverty.
“It is an ongoing conversation, a challenge and a test for the best and brightest in the financial industry to come up with solutions that while safeguarding the long-term savings of workers, do provide an avenue that can help to boost growth in the economy,” Edun added.
Backstory
After the Federal Executive Council (FEC) announced plans to use pension funds for infrastructure projects, the federal government encountered significant criticism.
- Many expressed concerns that the risks associated with this decision could have severe repercussions for workers’ financial security upon retirement.
- For instance, the former vice president of Nigeria, Atiku Abubakar, labelled the move as illegal, urging the federal government to half the plan.
- According the him, diverting these funds, which consist of the savings of diligent workers relying on their pensions in retirement, could disastrously affect the lives of countless Nigerians who have retired after years of service.
