In a significant move within Nigeria’s financial landscape, Pension Fund Administrators (PFAs) have directed a whopping N303.58 billion into MTN Nigeria Series I and Dangote Industries Series I. This disclosure comes from a report by the Pension Fund Operators Association of Nigeria (PenOp), where Oguche Agudah, the Executive Secretary of PenOp, shed light on the intricacies of these strategic investments.
Agudah detailed that these investments constitute a substantial portion of corporate debt securities within the pension fund assets investment portfolio. The specifics reveal an allocation of N116 billion into MTN Nigeria and a more substantial N187.58 billion into Dangote Industries, culminating in the overall investment sum of N303.58 billion.
The diversification strategy doesn’t stop there, as Agudah further highlighted other key investments made by PFAs. Notable allocations include N400 billion in energy power, N40 billion in Flour Mills of Nigeria, N11.7 billion in Unity Capital Series 11, N100 billion in LFZC funding special purpose vehicle, N45 billion in Shelter Afrique Series 1, N25 billion in Ardova Series 1, N115 billion in BUA Plc, and N34 billion in Prescott Plc.
This robust investment approach has yielded substantial growth in workers’ pension contributions, amassing over N8 trillion from various investment channels. As of October, the total funds under the Contributory Pension Scheme (CPS) stand at an impressive N17.64 trillion. Worker contributions represent 54% of this total, while the remaining 46% is attributed to returns on investment, marking a significant achievement since the inception of the CPS in 2004.
Agudah emphasized the prudent and judicious investment of workers’ contributions, mitigating the impact of inflation on pension funds. Furthermore, PFAs have successfully recovered N24.8 billion from defaulting employers by the end of the third quarter of the previous year.
In the realm of retiree payments, lump sum disbursements of N665.13 billion and N964.24 billion were made to annuity and programmed withdrawal retirees, respectively. An additional N208.86 billion was allocated to workers who lost their jobs before retirement age and were unable to secure employment within four months.
Looking ahead, PFAs have high expectations for 2024, including celebrating the 20th anniversary of the Pension Reform Act. The focus will be on micro-pensions, revising investment guidelines, attracting more RSA mortgage applicants and approvals, exploring offshore investments, and contributing to infrastructure consortiums.
In reflecting on the success of the Contributory Pension Scheme, Olumide Oyetan, President of PenOp and Chief Executive of Stanbic IBTC Pension Managers Limited, lauded it as one of the greatest national policies, safeguarding retirees from old-age poverty. Oyetan emphasized the unique structure of the CPS, incorporating regulators, PFAs, and Pension Fund Custodians to ensure a secure and balanced pension system.
