Pension fund managers eye N20trillion pension assets




Pension Fund Administrators(PFAs) across the country said they are expecting the pension assets to have risen to N20 trillion in the next eight years.

Speaking on behalf of the pension fund managers at a media briefing in Lagos, the Chairman, Pension Funds Operators of Nigeria(PenOp), Mr. Eguarekhide Longe, said this is achievable, taking into consideration, the rapid rate at which the fund is growing day by day, promising that, in the next eight years, the pension scheme would have recorded 30 million subscribers.

According to him, ‘the pension industry is looking at N20 trillion pension fund under management in the next eight years and 30 million subscribers.’

To achieve this, however, he said, the funds has to be invested in income- yielding projects, such that, the pension assets can be performing.

While debunking claims that PFAs don’t want to invest pension assets in infrastructure, he said the managers had requested the investment banking community to come out with products that abide by the investment guidelines in Pension Act, which operators can finance, noting that this has not been done.

“The fact is that there are ample provisions in the investment guidelines that allows for investment in projects, so to say, infrastructure, private equities and real estates, bonds, among others. But what has happened is not that the money is idle in the PFAs or that the fund managers have not looked for those projects. In truth, it is not their jobs to go and create projects, but we have actively sort the investment banking community to develop products that we can invest in.

“You all know there are real estate projects PFAs invested in. But we have bad experience with real estate investment trust. So, we have to be careful as to how we invest and deploy this fund. Now, we have investment provisions, if we find the right products, we will make this investment commitment,” he stressed.

Promising that the pension fund managers are ready to engage with government to expand the economic space, even though, it is not their primary objective, he added that, Nigerians, who contributes to the fund, deserve to live in good homes, drive on good roads, take their children to good schools, and have good healthcare.

He pointed out that the managers would be happy to finance those amenities, but that, care must be taken not to invest pension fund in a project that will not regenerate it, saying, ‘if you put pension fund in a project that does not regenerate it, the money is gone and in many cases, as we have found, the project has not been delivered because it was not properly conceived.’

He said: “We have the money, the orientation to invest, we have spoken to government, we have meetings with the ministry of finance, where we have defined what can be done and that meeting also has investment professionals in it and we have already communicated what we inclined to do and explained the investment guidelines to the minister and investment banking community. We are not sitting on the sideline, waiting for them to come back to us. We have constantly mounts pressure on them to bring the products. ”

He charged government to look at the pension fund from an economic strategy standpoint, to encourage more establishment and creates an environment where the pension fund could grow.
With this mindset, he noted that “You will want it to be invested in areas that will generate reasonable returns. You have enough long term money to do projects that are generating money, that comes back, available again to create more. That is what we are talking about, that is a virtues cycle.”

Of the N5.2trillion pension funds, he said, no less that N2 trillion of that amount of money is investment income, meaning that the managers of that money have received contributions over the last 11 years, a little over N3 trillion and that they have added N2.2 trillion to it from investments they made.

“It shows you that the money has been active. So, the philosophy of managing this money is to add to it. It means that the money has been used profitably. Now if you think about how pension fund should be used and so on and its objectives, you find out that it is being used by the managers for the right objectives, so that when people retires, they earn their money seamlessly,” he pointed out.

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