Over N7.04trn pension assets invested in FG, State securities, as NEC eyes N2trn

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Chuks Udo Okonta

While the National Economic Council (NEC) considered the possibility of investing N2 trillion out of the Contributory Pensions Fund on infrastructure development in the country, data obtained from the National Pension Commission (PenCom) said N7.04 trillion out of the N9.81 trillion pension assets had so far been invested in Federal and State Governments securities as at October 31, 2019.

According to NEC, the envisaged N2 trillion investment will be done through the Sovereign Investment Authority. This was contained in an interim report submitted by a sub-committee of NEC at a session, which was chaired by Vice-President Yemi Osinbajo, had state governors, Governor of the Central Bank of Nigeria, Minister of Finance/Budget/National Planning and other stakeholders at the Presidential Villa, Abuja.

The meeting, after reviewing the interim report, called for the submission of the final report in January, 2020.

The Governor of Kebbi State, Mr Atiku Bagudu, who spoke on the deliberations at NEC, said other countries, including South Africa and Saudi Arabia, used a portion of their pensions on infrastructure development.

Under the Pensions Reform Act, up to 20 per cent of the fund is allowed to be invested on infrastructure.

Bagudu said the sub-committee observed that only N169bn was provided for roads in the 2019 budget, an amount he described as “grossly inadequate.”

Another sub-committee of NEC chaired by the Governor of Kaduna State, Nasir el-Rufai, also submitted an interim report.

Bagudu gave details, “You will recall also that at the 99th NEC meeting, NEC discussed that since the privatisation of the DisCos, that at least 40 per cent that was meant to be for the state governments and federal government have not been so distributed.

“They presented an interim report that they are meeting soon to review the various information provided by the various agencies; then they will brief the counsel further.”

PenCom said the pension assets has soared to N9.81 trillion as at the end of October 2019.

According to PenCom, the fund assets gained N23 billion between September and October this year, even as N6.91 trillion of the assets was invested in Federal Government of Nigeria securities.

PenCom in its monthly summary of pension fund assets, noted that pension fund operators invested N4.58 trillion amounting to 46.66 per cent in FGN Bonds; N2.23 trillion in Treasury Bills (22.82 per cent); N5.40 billion in Agency Bonds (NMRC & FMBN), (0.06 per cent); N71.13 billion in Sukku (0.72 per cent) and N15.85 billion in Green bonds, (0.16 per cent)

PenCom noted that in line the the Multi-fund structure, Retirement Saving Account (RSA) Fund 1, N20.77 billion was invested; RSA Fund 11, N4.26 trillion; RSA Fund 111, N2.43 trillion and RSA Fund IV, N778.03 billion.

It stated that N4.75.68 billion, which is 4.85 per cent of the funds, was invested in domestic ordinary shares; while N66.98 billion, amounting to 0.68 per cent in foreign ordinary shares.

The pension industry regulator maintained that pension operators invested N127.21 billion (1.30 per cent) in State Government’s Securities; Corporate bonds got N308.44 billion (6.08 per cent); Corporate Infrastructure bonds, received N12.26 billion, (0.13 per cent); Corporate Green bonds, N29.99 billion(0.31 per cent) Supra-National Bonds got N4.07 billion (0.04 per cent); local money market, N1.15 trillion, (11.73 per cent) commercial papers, N97.85 billion (1.00 per cent); Banks, N1.05 trillion (10.73 per cent).

Others are, Reits, N11.87 billion, (0.12 per cent) Foreign Money Market Securities, N4.92 billion, (0.05 per cent); private equity fund, N32.57 billion, (0.33 per cent), Real Estate Properties, N243.59 billion, (2.48 per cent); infrastructure funds, N37.59 billion, (0.35 per cent) and cash & other assets, N95.31 billion, (0.97 per cent).

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