PenCom Plans Fresh Reforms To Safeguard Pension Savings

The National Pension Commission (PenCom) has announced plans to unveil a revised pension concern regularisation that volition grow opportunities successful alternate assets and present amended existent returns to contributors nether the Contributory Pension Scheme (CPS).

The manager wide of PenCom, Ms. Omolola Oloworaran, made the disclosure during a courtesy sojourn to president of the Trade Union Congress of Nigeria (TUC), Comrade Festus Osifo, successful Abuja, the committee stated connected Wednesday.

The existent concern model for pension funds nether PenCom specifies the maximum percent of full pension money assets that tin beryllium invested successful assorted plus classes to guarantee diversification and extortion of pension savings.

Under this framework, Pension funds tin put up to 100 per cent successful Federal Government Bonds, which are considered the safest plus class.

Up to 20 per cent of pension money assets tin beryllium invested successful State Government Bonds, with a bounds of 2% successful bonds issued by immoderate 1 state.

Corporate Bonds and indebtedness instruments, including existent property concern trusts (REITs), mortgages, and asset-backed securities tin marque up to 30% of the pension fund. However, investments are capped astatine 2.5% of full assets successful bonds by a azygous firm entity oregon immoderate 1 issue.

Money Market Instruments tin represent up to 35% of the portfolio, with issuer-specific limits ranging from 1% to 4% depending connected hazard ratings.

Ordinary shares (equities) person a maximum allocation of 25%, with issuer limits varying by hazard standing from 1% to 3% of the issued capital.

Investment successful open- and closed-end funds is capped astatine 5%, and each issuer oregon money is taxable to a 0.5% bounds connected full assets.

These limits are designed to equilibrium the request for safety, liquidity, and returns successful managing pension funds, ensuring that status savings are protected portion offering the maturation potential.
Ololoworaran explained that the inaugural forms portion of ongoing reforms to code the erosion of worth successful pension savings and mitigate the interaction of ostentation connected pension assets.

She added that PenCom is moving with the Central Bank of Nigeria (CBN) and the Federal Ministry of Finance connected frameworks that volition let pension investments successful naira but make returns successful dollars, thereby safeguarding status funds against currency risks.

The pension DG further revealed that the Commission would soon present a minimum pension for each retirees nether the CPS, supported by President Bola Tinubu’s caller support of a N758 cardinal enslaved to concern the Pension Protection Fund (PPF).

The PenCom brag reaffirmed the Commission’s committedness to deepening collaboration with organised labour to fortify the CPS and urged the TUC to enactment efforts to enforce leader compliance with the Pension Reform Act (PRA) 2014, which mandates timely remittance of workers’ contributions.

TUC President Osifo commended PenCom’s professionalism and efficiency, portion pledging the union’s enactment successful driving compliance.

He besides called for a reappraisal of the PRA to present much flexibility successful pension money investments, ensuring workers’ savings are amended shielded from ostentation and speech complaint pressures.