How Pension fund assets got to N13.6trn despite all odds

Posted by allcitynews.ng

Culled from LEADERSHIP Newspaper

Despite the odds confronting average Nigerian worker and harsh condition the economy, pension fund assets have risen from N13.42 trillion in December 2021 to N13.61 trillion at the end of January 2022, gaining N183.8 trillion within one month.

The report carried by LEADERSHIP Newspaper said: Available data sourced by LEADERSHIP shows that the fund opened last year (2021) at N12.29 trillion in January, but dropped to N12.24 trillion in February, following the drop in yield in the bonds market where the pension fund administrators have about 60 per cent of the pension fund invested.

In March 2021, the fund rose to N12.33 trillion, gaining N92billion while it gained a further N58 billion in April to stay at N12.39 trillion even as it soared by N95 billion in May, 2021 to put the pension fund assets at N12.49 trillion.

By June, the fund had grown to N12.65 trillion, amassing N165 billion in the process even as it recorded N123billion growth in July to stay at N12.78trillion.

The pension fund assets rose to N12.90 trillion in August, having gained N120 billion, while it pulled N101 billion gains in September, 2021 to stay at N13 trillion.

Similarly, between November and December 2021, the fund’s assets jumped by N168.29 billion.

The latest data sourced from National Pension Commission (PenCom) shows that 9.55 million workers are now under the Contributory Pension Scheme (CPS) as at the end of January, 2022 even as investment in federal government securities gulped N8.35 trillion of the N13.61 trillion pension assets.

Investment income, according to LEADERSHIP investigation, was instrumental to the continuous growth in pension fund, despite the fact that governments at majorly State level are not paying the monthly pension contributions of their workers as and when due.

Similarly, the huge increase, according to findings, was attributed to new pension contributions received, interest from fixed income securities and net realised on equities and mutual fund investments.

The Director General of PenCom, Mrs. Aisha Dahir-Umar, had said the growth in the pension fund assets under the new pension scheme, was an indication of prudent and sincere management of the pension fund by the pension operators and the regulator.

According to her, “the maintenance of a consistent growth trajectory continues to justify the Commission’s overriding investment philosophy of ensuring the safety of pension fund assets.”

To this end, the president, Pension Fund Operators Association of Nigeria (PenOp), Mr. Wale Odutola, had earlier noted that, operators are engaging market operators, the exchanges, the regulators, and international organisations to develop new and alternative products that pension funds can profitably invest in.

Odutola, who is the managing director/CEO, ARM Pensions, said operators were constantly improving on their service delivery and investment templates to ensure that the pension industry has a greater positive effect on national development by increasing its funding for infrastructure and transformational companies, sectors and projects in a sustainable manner that does not jeopardise their fiduciary responsibility to the pension contributors who are the ultimate beneficiaries of the funds.