Pension Assets Hit N5.8tn as Pencom Seeks to Invest 40% in Infrastructure

James Emejo in Abuja

The Director General of the National Pension Commission (PenCom), Ms. Chinelo Anohu-Amazu, on Tuesday hinted that the total pension assets had hit N5.8 trillion, adding that the commission was targeting to invest 40 per cent of the funds in infrastructure and housing by 2019.

She was, however, quick to add that the safety of such investments would not be compromised, as they would require guarantees from government and stakeholders.

She said currently, 15 per cent of the assets are invested in infrastructure bonds, five per cent in infrastructure funds, 35 per cent in corporate bonds, and 20 per cent in mutual funds.

Speaking in Abuja on “Using Pension Funds for Infrastructure Development to Enhance Inclusive Growth” at an interactive forum organised by the Financial Correspondents Association of Nigeria (FICAN), she also disclosed that a multi-funds investment structure was being put in place to allow people some flexibility in investment choice, taking into consideration age, among others.

However, the PenCom boss further revealed that having recovered about N10 billion from employers who had failed to remit pension deductions, the commission had engaged the Economic and Financial Crimes Commission (EFCC) to prosecute employers who criminally deduct pensions without remitting same to Pension Funds Administrators (PFAs).

Represented at the forum by the Head, Investment and Supervision Unit, PenCom, Mr. Ehimeme Ohioma, the director general said the prosecution of such employers should begin soon with a “name and shame” strategy.

Nevertheless, she said the unavailability of investment projects remained a major challenge to the investment of pension assets in the country.

She identified other constraints to include political risk, policy somersaults, and lack of continuity, adding that less than three per cent of assets are currently invested in infrastructure through state government bonds.

She said government and other stakeholders had not really taken advantage of pension assets to develop infrastructure in the country.

Anohu-Amazu said as part of efforts to deepen pensions, a micro-pension scheme was being finalised to provide opportunities and products targeted at over 50 million people in the informal sector of the economy.

She said the proposed infrastructure projects should, however, be commercially viable and self-financing or able to generate cash flows to repay overtime while bid/concession processes must be open and transparent.

She added that political risks must be guaranteed for projects by the federal government or the IFC/World Bank and African Development Bank (AfDB) to effectively tap into pension funds for infrastructure development.