Nigeria: PFAs Can Invest N2 4 Trillion in Infrastructure Funds, Bonds - Pencom allafrica.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from allafrica.com Daily Mail and Mail on Sunday newspapers.
Federal Secretariat, Abuja
As of August 31, 2020, the pension assets under the management of PFAs were worth N11.35 trillion.
Governors have declared interest to borrow from the fund, but the Pension Reform Act, 2014 (PRA, 2014) prohibits such borrowing.
Section 89, subsection 1, paragraph C of the PRA, 2014, provides that a PFA shall not “apply any pension fund assets under its management by way of loans and credits or as collateral for any loan taken by a holder of retirement savings account or any person whatsoever.”
Similarly, section 2, subsection 6 of the 2019 Regulation on Investment of Pension Fund Assets issued by PenCom provides that “A PFA shall not engage in borrowing or lending of pension fund assets.”
The commission said the Regulation on Investment of Pension Fund Assets had provided that PFAs could invest pension assets for infrastructure development through bonds and funds respectively, up to a maximum of 15 per cent and 5 per cent of assets under management.
Going by this regulation, PenCom revealed that given the valuation of the pension assets as at October 2020, which is N12.05trn, up to N2.4 trn could be invested by the PFAs in infrastructure funds and bonds.
“The main challenge inhibiting the PFAs from investing the pension assets for infrastructure development is the non-availability of eligible instruments (funds and bonds) in the financial market. The commission and the pension industry would support efforts at issuing eligible instruments for pension funds to support infrastructure development in Nigeria,” PenCom stated.