Pension Fund Operators Project   N20trn Assets in Eight Years

By Ebere Nwoji

Pension assets will hit the N20 trillion mark in the next eight years,  up from the current  N5.32 trillion, the Pension Fund Operators Association of Nigeria (PenOp) has said.
Chairman, PenOp, Mr. Eguarekhide Longe, who made the disclosure at a media retreat organised by the association in Lagos, also hailed the National Pension Commission (PenCom), the industry regulator, for its latest decision in asking the federal government   to transfer its subvention for the year into payment of Accrued Rights of workers who worked for government and were transferred from the old scheme to the contributory pension scheme.
Government is said to be owing over N20 billion Accrued Rights of workers which it supposed to transfer to Contributory Pension Scheme fund managers through PenCom.

The non-transfer of the  money  has been truncating the smooth running of the existing contributory pension scheme and payment of benefits to the workers and pensioners concerned.
Longe said pension fund managers cannot in any way compromise in protecting the already accumulated asset from contributors but would guard its safety jealously through wise and profitable investments and develop new ways of growing the fund.
He said one of the ways of growing the fund is through promotion of micro pensions to increase the number of contributors into the scheme.
He noted that many Nigerians complained that pension fund investment has not made the desired impact in the economy especially in the area of infrastructural development, explaining pension industry or pension fund managers cannot be blamed for that situation. According to  over 70 per cent of pension fund is currently invested in government bond.

“It  cannot be blamed on the industry  but on the structure of the country because  there is over 70 per cent of pension fund in government  bonds. Some governments  have invested the money in infrastructure to have impact on the local economy and a good example is Lagos State government,” he said.
He argued that as a Pension Fund Administrator (PFA), the pension fund managers cannot be held responsible  for what government  does with money that it borrowed.

Longe said   ideally, money that is borrowed  for reasonable long term should be used to develop reasonable long term project and  should not be used to fund recurrent expenditure,
“What has government done with all the money it borrowed from institutional investors. For instance, if you borrow $2 billion and use it as bail out money, how do you think your  creditors will feel. All the money borrowed by government  in bonds should have been used to develop infrastructure, it could have had significant  impact on the economy,” he  said.
He spoke on  the impact of the  current economic  depression in the country on pension industry, saying the industry is heavenly affected due to the challenges in the economy.
“Remittances have gone down, there is a gap in the payment of  accrued right,” he said.

He, however, said PenCom has been wonderful as far as the accrued rights issue is concerned, disclosing that  the commission has tried to ensure that there is integrity in the system.
He hinted that as all government parastatals, Ministries, Departments and Agencies (MDAs), are required in the budget to request for what their operation requires.
PenCom has asked government to transfer its subvention to pay for the accrued rights that has been outstanding..
According to him, the commission had said that rather than give it subvention to run, government should transfer that subvention to take care of the need of pension industry.
Describing this as a fantastic example, Longe urged Nigerians to exercise patience with the existing pension system in the country, assuring that it will later serve as a role model system in the world. He also advised contributors  to regard whatever imperfections in the pension system as short term issues that will be resolved.