Foreign currency denominated investments from CPFAs, Existing Schemes drive pension assets gain to N1.18tn


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Chuks Udo Okonta

The National Pension Commission (PenCom) has said the N1.18 trillion surge in pension fund assets gain in January 2024 was driven by foreign currency denominated investments made by Closed Pension Fund Administrators (CPFAs) and Existing Schemes.

Findings by Inspenonline, revealed that the growth was driven by the increase in foreign exchange.

An examination of the Unaudited Report on Pension Funds Industry Portfolio for the Period Ended January 31, 2024, released today by PenCom, revealed that Existing Schemes as at November 2023, had net assets value of N2.02 trillion, which moved to N2.10 trillion in December, recording N82.54 billion.

But in January 2024, the Schemes had net assets value of N2.21 trillion as sgainst N2.10 trillion in December 2023, attaining growth of N104.78 billion.

The Closed Pension Fund Administrators (CPFAs) in November 2023 had net assets value of N1.79 trillion and in December N1.94 trillion with a growth of N145.82 billion.

In January 2024, they recorded net assets value of N2.49 trillion as against N1.94 trillion in December, amounting to a growth of N552.15 billion.

PenCom noted that pension schemes in the private sector existing prior to the introduction of the Contributory Pension Scheme (CPS) in June, 2004 were allowed to continue as CPFAs, subject to guidelines issued by it.

It said the companies are required to have operated a fully funded existing pension scheme with assets of at least N500 million. A condition precedent on the issuance of a CPFA license is that the company must possess the requisite capacity for the management of pension fund assets and show that it had managed its pension scheme effectively for at least five years prior to the commencement of the CPS.

The CPFAs, it noted operate mostly as Defined Benefits Schemes with a guarantee from the sponsor companies over any funding deficit. The Pension Reform Act, 2014 has foreclosed new entrants into the CPFAs. Commencing 1st July, 2014, all new employees of the sponsor companies are required to join the CPS and open Retirement Savings Accounts (RSAs) with a PFA of their choice. Furthermore, an existing employee still reserves the right/option of pulling out of the CPFA to join the CPS.

Closed Pension Fund Administrators include: Chevron CPFA ltd; Nestle Nigeria Trust ltd; Nigeria Agip CPFA ltd; Progress Trust CPFA ltd; Shell Nigeria. CPFA ltd and Total (E & P) Nigeria CPFA ltd.

The National Pension Commission (PenCom) stated this today in its

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