By Adedapo Adesanya
The total pension assets under the Contributory Pension Scheme (CPS) rose by four percent or N359 billion from N10.2 trillion at December 2019 to N10.6 trillion as of the end of April 2020.
This was disclosed in a statement from the National Pension Commission (PenCom), where it said despite the challenges in the Nigerian economy caused by the coronavirus pandemic, it was still able to grow.
The commission disclosed that the 66.3 percent of the fund amounting to N7 trillion had been invested in Federal Government of Nigeria’s securities.
Some of the funds were invested in agency bonds, supra-national bonds, commercial papers, foreign money market securities, and open/closed-end funds.
Other investment portfolios where the operators invested the funds were Real Estate Investment Trusts (REITs), private equity funds, infrastructure funds, cash and other assets.
In the statement, the acting Director-General of PenCom, Mrs Aisha Dahir-Umar, said the scheme was important in the face of contemporary developments in Nigeria’s pension landscape and the Nigerian economy as a whole.
She said, “The Contributory Pension Scheme was established to address challenges bedeviling the erstwhile retirement benefit system (Pay As You Go/Defined Benefit) in the public sector and Provident Fund/Nigeria Social Insurance Trust Fund in the private sector.”
On his part, the pioneering Director-General, National Pension Commission, Mr Muhammad Ahmad, said there was a need to encourage development of enabling framework for pension funds to facilitate national development.
He said Public Private Partnership rules needed to be strengthened at both the national and state levels so the scheme can expand.
Mr Ahmad said that Africa infrastructure collaboration initiatives such as roads, rails, telecommunication and power among others, should also be promoted.
He said, “There is also a need to promote credit enhancement market in the short term.
“Currently, infraCredit is virtually the only private institution, backed by MDFOs, providing such guarantees (incentives) in Nigeria.
“However, enabling environment such as policies on project preparation to enable quality project issuance, needs to be established so as to walk ourselves out of provision of guarantees in the future.”
Commenced in 2004, the Contributory Pension Scheme (CPS) seeks to, amongst others, ensure that workers receives their retirement benefits as and when due.
The CPS is contributory in nature. This means that the employer will contribute 10 percent, while the employee will contribute 8 percent to make up the 18 percent minimum monthly contribution.
An employer may, however, elect to contribute the entire 18 percent on behalf of its employees. In addition, voluntary contributions are allowed.
Modupe Gbadeyanka