The Pension Fund Administrators have invested a total of N216.8bn of the increasing funds under the Contributory Pension Scheme in real estate.
Latest figures obtained from the National Pension Commission indicate that this amount represents 3.4 per cent of the total N6.2tn assets under the management of the pension operators.
The commission also stated that substantial funds had been invested in domestic and foreign ordinary shares, the FGN and state securities, among other investment portfolios as of the end of February.
The Chairman, Pension Fund Operators Association of Nigeria, Mr. Eguarehide Longe, who spoke with SUNDAY PUNCH on Friday, said the pension funds were active in different investment portfolios.
He said the bulk of the funds had been invested in government bonds, adding that some governments that had taken the money invested it in infrastructure.
Ideally, he explained that money borrowed for a reasonably long term should be used for long-term assets and not to fund recurrent expenditure.
“We are there to invest in a way that the funds will not be lost,” he said.
According to him, if the funds are used for infrastructure, this can have significant impact on the economy.
Longe, who said some investors had been approaching the operators to access the funds, noted that the real sector was not a place where they could just invest huge amount, adding that sectors such as agriculture were areas that needed to be well understood before investing the funds there.
The Pension Reform Act was enacted to provide a contributory scheme for the payment of retirement benefits of employees in both public and private sectors.
The Act mandates every employee to open a Retirement Savings Account in their name with any Pension Fund Administrator of their choice and notify their employers.
Employers, according to the law, are required to deduct eight per cent of the workers’ monthly emolument and add another 10 per cent, which should be paid into each employee’s RSA not later than seven days after the salary is paid.
Originally published in The Punch