T
he Nigeria Employers Consultative Association (NECA) has expressed concerns over the attempt by State Governments to borrow N17 trillion from the pension fund assets to fund infrastructure development.
Speaking in Lagos, the Director General of NECA, Dr. Timothy Olawale said the issue of investment and borrowing from pension fund assets have remained contentious and vexatious to many Stakeholders.
He said while it is obvious that the nation needs huge investment to address current infrastructure deficit, the contention remains how to fund the deficit.
While Sections 85-91 of the Pension Reform Act 2014 stipulated the classes of assets that Pension funds should be invested in, with overriding provisions for the funds safety, past and present alleged misapplication of loans by Government has created deep mistrust in the minds of citizens and eroded the confidence in Government, he said.
Punch Newspapers
Sections
Pension funds, by definition, are monies put aside on behalf of employees, which are then paid to them in monthly instalments upon retirement from full-time work. For millions of retirees, it’s the only source of living in old age. Many have toiled day and night for decades, putting a little on the side for upkeep in the twilight of their lives. The people in charge of the funds, Pension Fund Administrators, owe the utmost ‘fiduciary’ (i.e. sacred) duty to their members not to do anything that could put the funds in the slightest jeopardy. A breach of that duty quite rightly attracts the severest punishment under the law across all jurisdictions. The funds are to be treated not only with the highest due diligence, but also treated as if millions of lives depended on it, which indeed is the case. For employers, (be it government or company bosses), pension funds are the holy grails of investment savings; they are the nearest thing to God’s personal
By Peter Egwuatu
ECONOMY
THE National Pension Commission, PenCom, recorded fund withdrawals by pensioners amounting to N14.96 billion through 26,458 Retirement Savings Account (RSA) holders under the age of 50 in the last nine months.
This represents an increase of N1.5 billion or 11.14 percent from N13.46 billion by 28,268 RSA holders in the corresponding period of nine months 2019.
The Commission also approved the payment of N20.48 billion as death benefits to the beneficiaries of 1,821 deceased employees during the nine months period ended September 30, 2020.
Vanguard’s investigation show that the number of requests to access 25 per cent RSA balances by disengaged workers has been on the increase.
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.”