Pension Funds hit N5.8trn

ABUJA— The nation’s pension fund has hit N5.8 trillion, the National Pension Commission, PenCom, disclosed, yesterday.

Presenting a paper at the  forum of Finance Correspondents’ Association of Nigeria, FICAN, in Abuja, yesterday, Head of Investment Supervision Department, Mr. Ehimeme Ohioma, who represented  the Director-General, Mrs. Chinelo Anohu-Amazu, said the huge asset was waiting to be invested in infrastructure where the nation currently suffered a huge deficit. He said PenCom was very interested in seeing a significant investment of pension fund in infrastructure projects, since they had the highest returns and guarantee rapid socio-economic development in the country.

“Several countries in the world have used pension funds to finance infrastructure. So why not Nigeria? Currently, pension funds account for the largest pool of savings, patient capital in Nigeria,” Ohioma said. 

According to him, although windows have been created in the capital market through which pension funds could be invested, especially through bond and infrastructure funds, they have not attracted any significant volume, as total investment in infrastructure stands at a mere four per cent of the allocated 20 to the sector. On the low utilization of the pension fund, the Head of Investment Supervision said: “Investors will only invest in available products.

Pension Fund Administrators cannot develop products in which they are to invest. We are now engaging stakeholders, we are now asking ‘why are you not developing these products?’ “Over the years, we have amended our regulations to enable people come up with more products. We engage stakeholders and if we are convinced that our regulations are too stringent because of the level of our development, we need to loosen it up a little bit to encourage people to come in to produce more products, yes we will do that. But I think execution is our major challenge in the country.” Ohioma identified lack of political will and policy sommersaults as major impediments that could discourage investors from investing in infrastructure due to fears that successive administrations may not continue on existing frameworks or even abandon projects financed with pension assets.

          

Enforcement of pension remittances Speaking on the enforcement remittances of pension deductions by organizations, especially, in the private sector, Ohioma said PenCom had engaged recovery agents and that about N10 billion had been recovered through such drives. He disclosed that the commission had held discussions with the Economic and Financial Crimes Commission (EFCC) and warned that defaulters would soon be prosecuted. His words: “So far, close to N10 billion has been recovered from companies that deducted but failed to remit.  It is an on-going exercise and we have approached the Economic and Financial Crimes Commission, EFCC, because it is criminal to deduct pension contributions from workers salaries and refuse to remit to their Retirement Savings Accounts. 

“We are taking these things in stages. We have engaged some recovery agents who have done some works and we are now going into the next stage of the people we are going to prosecute. The commission cannot prosecute. We need the assistance of law enforcement agencies to do that.”