In a recent report released by the National Pension Commission, Pension Fund Administrators (PFAs) have demonstrated a strong commitment to national development by investing a substantial N130.18 billion of the funds from the Contributory Pension Scheme (CPS) into infrastructure projects by the end of September 2023.
The unaudited report, which details the pension funds industry portfolio for the period ending on September 30, 2023, indicates a strategic allocation of pension assets to bolster the country’s infrastructure.
This move is part of a broader investment strategy that has seen the total assets under the CPS surge to an impressive N17.35 trillion. The PFAs are not only focusing on infrastructure but are also diversifying their investments across various asset classes.
These include domestic and foreign ordinary shares, an array of government securities from both federal and state levels, and a selection of money market instruments, among others.
The investment in infrastructure, however, is a notable highlight, reflecting the PFAs’ role in fostering sustainable economic growth and development.
The commitment of the PFAs to channel pension funds into productive sectors of the economy is a strategic approach that promises to yield long-term benefits for the nation, including the potential for improved public services and job creation.
This investment also aligns with the government’s objectives to enhance the country’s infrastructure and stimulate economic progress.
The National Pension Commission’s report, which also encompasses Approved Existing Schemes, Closed Pension Fund Administrators, and RSA Funds, including unremitted contributions at the Central Bank of Nigeria (CBN) & legacy funds, provides a transparent view of the pension industry’s performance and its pivotal role in the national economy.
The commission had in its amended investment regulation highlighted the requirements for investing the funds in line with the provisions of the Pension Reform Act, 2014.
It said the purpose of the regulation was to provide uniform rules and standards for the investment of pension fund assets.
According to the regulation, pension fund custodians must only take written instructions from licensed PFAs concerning the PFAs’ investment and management of pension fund assets held in the custody of the PFCs on behalf of the contributors.
It said the PFCs, in discharging their contractual functions to PFAs, must not contract out the custody of pension fund assets to third parties except for allowable investments made outside Nigeria.
“The PFC shall obtain prior approval from the commission before engaging a global custodian for such allowable foreign investments,” it said.
According to the regulation, the PFAs, in discharging their contractual functions to contributors, must not contract out the investment/management of pension fund assets to third parties except for open/close-end/hybrid funds and specialist investment funds allowed by the regulation.