By Adedapo Adesanya
The National Pension Commission (PenCom) says it is working with the Nigeria Mortgage Refinance Company (NMRC) on the implementation of a section of the Pension Reform Act (PRA) in order to push for home ownership for workers in the country ahead of retirement.
This was made known by the Head, Research & Strategy Management Department of PenCom, Mr Umaru Farouk, during the webinar on Housing Finance Ecosystem: Matching the Demand and Supply and the Intervention, hosted by the Housing Development Advocacy Network (HDAN) in Abuja.
He said the implementation of this section of PRA will allow contributors use part of their pension savings to pay their personal equity towards having a primary home.
He explained that part of the things the commission was waiting for included the mortgage guaranteed by the Central Bank of Nigeria (CBN).
He said: “There is one important issue that we have been working with NMRC on. In terms of the implementation of the provisions of Section 89(2) of the PRA; that section provides that contributors could actually use part of their pension savings to pay their personal equity towards having a primary home.”
Mr Farouk said the commission had not really gone so far in terms of implementing section 89 (2), but waiting for some feedback from NMRC to be able to review the regulation, make some additions in order to come up with a working framework.
“I believe we are working with the right agencies in this aspect,” he added.
Giving a clarification on how the money received by the commission are invested, Mr Farouk explained that PenCom only grants funds when there are supporting instruments, either as a fund or a bond as contained in its existing regulations.
In terms of the existing regulation, he said the agency could actually invest 20 percent in some situations, and in some cases could actually invest up to 24 percent in infrastructural development, adding that this includes housing infrastructure, 15 percent in infrastructure bonds and five percent in infrastructure funds.
“In some situations, people go more than just 5 percent in infrastructure funds or more than just 15 percent in the infrastructure bonds,” he said.
On how the commission invests the money, he said: “We don’t go directly cash. We don’t just give cash and say go and build a road or build some housing units.
“We don’t do that. How do I refund on a bond? You need to come with the supporting instruments either a fund or a bond then PFAs can buy into the bond or into the fund,” he added.
