The Pension Fund Managers have invested a whopping N7.09 trillion in the federal government securities, which includes; bonds and treasury bills, LEADERSHIP learnt.
This is even as the pension Fund assets has risen to N10.51 trillion as at the end of February, jumping from N10.21 trillion it was in January, 2020. This shows a growth of N30 billion within one month.
However, the pension fund managers investment in federal government securities has allowed the government fund its expenditure as well as embarks on some capital projects through this local borrowing.
LEADERSHIP findings revealed that the N7 trillion investment in government securities translates to about 70 per cent of the entire pension assets as Pension Fund Administrators (PFAs) continue to see this instrument as a safe and the best investment option.
To this end, a document sourced from the National Pension Commission (PenCom) shows that pension operators invested N5.62 trillion (53.44 per cent) in FGN Bonds while Treasury Bills attracted N1.37 trillion (13.02 per cent) investment amount even as N532.45 billion (5.07 per cent) was invested in domestic ordinary shares and N65.04 billion (0.52 per cent) in foreign ordinary shares.
Other investment instruments that attracted funding from the Pension assets include; Agency bond (NMRC & FMBN) N11.80 billion (0.11 per cent); Sukuk bonds, N84.42 billion(0.80 per cent) and green bonds, N13.77 billion(0.13 per cent).
The Pension industry regulatory body said, state government securities gulped N141.07 billion (1.34 per cent), corporate bonds, N615.41 billion (5.86 per cent); corporate infrastructure bonds, N20.23 billion (0.19 per cent); corporate green bonds, N26.65 billion (0.25 per cent); bank placement N1.48 trillion (14.05 per cent); commercial papers, N125.95 billion (1.20 per cent) and real estate properties, N219.72 billion (2.09 per cent).
Other classes of assets include, supra-national bonds, N2.66 billion (0.25 per cent); open/close end funds, N19.31 billion (0.18 per cent); mutual funds, N29.99 billion (0.18 per cent); private equity fund N38.41 billion (0.37 per cent); infrastructure fund, N47.33 billion, (0.45 per cent); foreign money market securities N7.83 billion, (0.07 per cent); Reits, N10.69 billion, (0.10 per cent) and cash & other assets, N64.85 billion, (0.62 per cent).
The consistent rise in the volume of the nation’s pension Assets, according to LEADERSHIP investigation, was attributable to new pension contributions received, interest from fixed income securities and net realised on equities and mutual fund investments.
Investment income, according to LEADERSHIP investigation, was instrumental to the continuous growth in pension fund, despite the fact that government at the state and federal levels are not paying the monthly pension contributions of their workers as and when due.
The acting director-general, PenCom, Mrs Aisha Dahir-Umar, said, the Contributory Pension Scheme(CPS), which has attracted N10.51 contributions, has been very impactful in Nigeria since the commencement of its implementation in 2004.
To this end, she added that the formation of long term domestic capital, represented by the huge value of pension assets, belonging to over nine million formal sector participants, is slowly, but surely, changing Nigeria’s financial landscape.
This, by extension, she stressed, is also transforming the course and pace of socio-economic development in the country.
Dahir-Umar, said, the pension industry is one of the fastest growing industries in the country with the support of the organised private sector and labour.
This growth, she said, justifies PenCom’s emphasis on the safety of pension funds as the bedrock of sustaining the CPS, assuring all stakeholders that the pension reform remains steadily on course. ‘These modest milestones notwithstanding, the Commission and Pension Operators are committed to actualising the growth potentials of the pension industry’, Dahir-Umar, pointed out.