Pension Funds Hit N5.4trn

Nigeria’s pension funds has hit nearly N6 trillion with approximately seven million contributors.
The Director-General, National Pension Commission, (PenCom), Mrs Chinelo Anohu-Amazu who disclosed this revealed that the pension funds has put the nation on a high pedestal in terms of worker’s welfare in the continent.
She said that the funds was not below N5.4 trillion with the tendency to appreciate shortly saying it was a good development for the sub-sector which hitherto was comatose.
While speaking on the Role of Regulators in Deepening Capital Market at the 2016 Business Day Capital Market Conference in Abuja she added that Nigeria had the capacity to generate more funds and that the Commission was already on a micro pension project.
The theme of the conference was “Deepening Nigeria’s Capital Market through Maximum Utilisation of Pension Funds.’’
The PenCom DG, who added that pension fund was one of the single largest institutional investments in Nigeria, operates entirely on deductions from workers but that it is imperative for operators of the fund to derive ways of developing products to enhance the yield of the funds.
She said that the challenges faced on investments of pension funds arise from lack of creativity of the operators.
“The PFAs are constrained; they are unable to develop the products they invest which is why we have a preponderance of the pension funds in Federal Government securities, there are no alternatives.
“Part of the thing I want to throw out to operators in this room is to work towards developing alternatives and new products,’’ she said.
The Director-General said the regulators were doing their bit at ensuring that the PFAs were highly regulated.
She said several regulations had been done and what was left was to ensure the official issuance of those regulatory actions in the sector.
“Our eyes are on two things; protecting the funds and making sure that its primary mandate as required by law, which is paying retirement benefit as and when due, is not tampered with.
“That mandate also extends to making sure that the value is not eroded, and it will be our joy that various institutions are deepened by the pension fund and the capital market is just one of those institutions,” she added.
She said the issue of channeling the pension fund to the capital market was welcomed as long as the contributor was assured of the channel the fund was taken to and its safety.
She added that this could be achieved through efficient regulation and prudent management of the fund.
Also speaking at the event, the Managing Director, Nigeria Deposit Insurance Corporation, Alhaji Umaru Ibrahim said one of the major challenges in the sector was the unwillingness of people to invest.
He said, “it is not only about raising the money but finding ways to invest it and we also have to be conscious of the returns and the risk involved in investment.”
The Principal, Bain and Company Nigeria, Mr Jude Uzonwanne said lack of competition at the PFAs was causing “an extreme conservatism in the sector’’.
According to Uzonwanne, regulators should not only face trend but be more effective by focusing on changes that will trigger competition among PFAs.
He said mergers and acquisition should be encouraged as it would make CEOs to sit up and urged that family companies should be taken public to ensure sustainability


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