New Telegraph

Pension assets: Infrastructure fund drops to N53.79bn

AGITATION

Government officials agitate that part of the pension fund should be invested in infrastructure

 

Investment in infrastructure fund by Pension Fund Administrators (PFAs) experienced a slight drop in the month of August, according to data on the website of the industry regulator, National Pension Commission (PenCom).

 

The asset, which is among the least invested by the PFAs took a dive from N54.84 billion in June, N54.21 billion in July to N53.79 billion in August.

 

The N53.79 billion represents 0.47 per cent of the total pension assets currently put at N11.35 trillion. A further breakdown of investment revealed that N7.52 trillion (66.27 per cent) of the amount has been invested in Federal Government’s securities.

 

According to the pension regulator, Retirement Savings Account (RSA) registration stood at 9.10 million as the retiree fund has been reclassified in the multi-Fund structure stood at, Fund I, N28.42 billion; Fund II, N4.91 trillion; Fund III, N2.91 trillion; Fund IV, N915.13 billion and Fund V, N43 million. It noted that Closed Pension Fund Administrators Fund (CPFAs) was N1.41 trillion and Existing Schemes (ES), N1.17 trillion.

 

Further breakdown revealed that N544.72 billion (4.80 per cent) was invested in domestic ordinary shares and N79.16 billion (0.70 per cent) in foreign ordinary shares.

Under the FG securities, FGN bonds got N6.39 trillion (56.28 per cent); treasury bills, N1.00 trillion, (8.85 per cent); agency bond ( NMRC & FMBN) N10.90 billion, (0.10 per cent); Sukuk bonds, N104.51 billion, (0.92 per cent) and green bonds, N13.37 billion (0.12 per cent).

 

PenCom maintained that state government securities gulped N148.14 billion, (1.31 per cent), corporate bonds, N754.95 billion, (6.18 per cent); corporate infrastructure bonds, N16.84 billion, (0.15 per cent); corporate green bonds, N37.10 billion, (0.33 per cent); bank placement N1.64 trillion, (14.44 per cent); commercial papers, N245.15 billion, (2.16 per cent) and real estate properties, N218.27 billion, (1.92 per cent).

 

Other classes of assets include supranational bonds, N1.33 billion, 0.01 per cent); open/close end funds, N18.43 billion, 0.16 per cent); mutual funds, N29.76  billion, (0.26 per cent); private equity fund N33.07 billion, (0.29 per cent); infrastructure fund, N53.79 billion, (0.47 per cent); foreign money market securities N16.91 billion, (0.15 per cent); Reits, N11.32 billion, (0.10 per cent) and cash & other assets, N63.90 billion, (0.56 per cent).

 

Since the commencement of the Contributory Pension Scheme (CPS), the PFAs have consistently invested the contributions of registered workers in specific portfolios as prescribed by law.

 

This is also as the regulator revealed in its report that it had recovered a total of N16.85bn from defaulting employers. According to the 2019 report released by the commission, for the year under review, the sum of N1.84 billion was recovered.

 

“This brought the total recoveries from inception of the exercise in 2012 to December 31, 2019, to N16.85 billion.

 

“This figure represents principal contributions of N8.557 billion and penalties of N8.29 billion.

 

The amounts recovered had since been credited to the respective RSAs of the employees,” the report said. It further highlighted that a list comprising 69 defaulting employers that failed to remit outstanding pension contributions and penalty as established by the RAs were forwarded for legal

 

actions, adding that in the meantime, the commission continued to record successes with respect to matters at the courts while many employers had requested for out of court settlements.
On the update on implementation of the Contributory Pension Scheme by state government, the report observed that as at December 31, 2019, 25 states had enacted laws on the CPS while seven states were at the bill stage.
Four had, however, embarked on pension reform but chose to adopt the Contributory Defined Benefits Scheme (CDBS) while one continued with the Defined Benefits Scheme.
According to the commission, it also conducted the 2019 Routine Examination of Pension Transitional Arrangement Directorate (PTAD) with copies of the examination reports forwarded to the Honorable Minister of Finance and the Executive Secretary of PTAD.

 

“Similarly, the commission continued to analyse the monthly statutory reports submitted by the Directorate and also monitored the pensioners’ verification and enrollment exercises carried out in the six geopolitical zones and concluded in December 2019.

 

Specifically, the commission said it also received and reviewed monthly compliance reports submitted by pension operators with key issues observed from the review of the compliance reports being increase in the value of uncredited pension contributions; delay in the payment of retirement/death benefits due to incomplete documentation and communication issues; non-procurement of Group Life Insurance Policy for employee’s contrary to the provisions of Section 4(5) of the PRA 2014 and non-remittance of Pay-As-You-Earn (PAYE) taxes in violation of the provisions of Section 81 of the Personal Income Tax Act (PITA).

 

“The commission had advised the concerned operators to ensure effective resolution of the issues,” it noted.

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