Pension Fund Administrators, PFAs have invested N66.86bn funds under the Contributory Pension Scheme in infrastructure.
The National Pension Commission in a report, titled ‘Unaudited report on pension funds industry portfolio for the period ended 31 July 2021: Approved existing schemes, closed pension fund administrators and RSA funds’.
It said total funds under the scheme stood at N12.78tn as of July 2021.
According to PenCom, the total Retirement Savings Accounts stood at 9.4 million as of June.
The commission had in its amended investment regulation highlighted the requirements for investing the funds in line with the provisions of Pension Reform Act, 2014.
It said the purpose of the regulation was to provide uniform rules and standards for the investment of pension fund assets.
According to the regulation, pension fund custodians must only take written instructions from licensed PFAs with respect to the PFAs’ investment and management of pension fund assets held in the custody of the PFCs on behalf of the contributors.
It said the PFCs, in discharging their contractual functions to PFAs, must not contract out the custody of pension fund assets to third parties except for allowable investments made outside Nigeria.
“The PFC shall obtain prior approval from the commission before engaging a global custodian for such allowable foreign investments,” it said.
According to the regulation, the PFAs, in discharging their contractual functions to contributors, must not contract out the investment/management of pension fund assets to third parties except for open/close-end/hybrid funds and specialist investment funds allowed by the regulation.
PenCom stated that the PFAs must maintain a multi-fund structure as provided in the regulation to govern the investment of pension fund assets of RSA funds.
It said, “In addition to the requirements of other guidelines issued by the commission on corporate governance, ethics and business practices, each PFA shall establish an investment strategy committee as well as a risk management committee, in compliance with section 78 of the Pension Reform Act, 2014.
The investment strategy committee, in addition to other functions specified in the Act, shall formulate internal investment strategies to enable compliance with this regulation, taking into cognisance the macro-economic environment as well as the investment objectives and risk profile of the respective PFA Funds.”
It also said the internal investment strategies must be approved by the PFA in a formal board meeting at least once every year or as frequently as changes occur in the macroeconomic environment that may affect pension fund assets.