TheCable

The National Pension Commission (PenCom) says it is closely monitoring pension fund adminstrators (PFAs) to ensure all investments align with the Iaw.

The commission, in a document seen by TheCable, said the PFAs are required to submit a daily valuation report on pension fund investments through which PenCom ensures strict adherence to the investment regulation.

It said PFAs, as investment fiduciaries, act on behalf of retirement savings account (RSA) holders to manage pension funds.

“The pension contributions in the RSAs are pooled into Funds and invested by PFAs based on the requirements of the PRA 2014 and the Regulations of Investment of Pension Funds Assets,” PenCom said.

“The overriding objectives guiding pension funds investments are maintaining safety and fair returns.

“These objectives are meant to ensure the timely payment of benefits to employees upon retirement.

“The PFAs are responsible for making investment decisions and ensuring safety and fair returns for the benefit of contributors.

The commission outlined the allowable investment outlets for pension fund investments to include bonds, treasury bills and other securities issued by the federal government and eligible state governments.

It said pension funds can also be invested in bonds, debentures, redeemable shares and other debt instruments issued by corporate entities and listed on a stock exchange under the investment and securities act.

“Other allowable assets are: ordinary shares of public limited companies listed on a stock exchange under the Investment and Securities Act; bank deposits and securities; real estate development investments; and specialist investment funds and other financial instruments as enshrined in the Investment Regulation,” it added.

PenCom said PFAs or its agents have been prohibited from investing pension fund assets in the shares or any other securities issued through public or private placement arrangements by a related party/person of any shareholder of the PFA.

It defined related persons/party as natural persons related by blood, adoption or marriage.

It also said they may be legal entities, one of which has control or significant influence over the other, or both of which are controlled by another person or entity. 

“Therefore, all investments made by licensed PFAs in eligible securities and corporate entities are “ring-fenced” and belong to the RSA holders and other pension beneficiaries,” the commission said.

“The diligent implementation of the PRA 2014 by PenCom has resulted in the continuous accumulation of pension fund assets to over N14.99 trillion as of 31 December 2022.”