Tuesday, 06 November 2012 00:00
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PFAs investments in govt bonds stand at N1.86tn — PenCom

The National Pension Commission (PenCom), has said total amount of Pension Fund Assets so far invested in government bond has risen from N1.47tn in 2011 to N1.86tn.
This was disclosed in a paper on developments in the pension industry presented in Abuja by the Head, Research and Corporate Strategy, PenCom, Dr. Farouk Aminu.

He said as at August 2012, pension funds invested in FGN Securities alone out of the N1.86tn was N1.75tn, while states government bonds accounted for the balance of N109.24bn.
Giving a breakdown of the various assets categories invested, he said N335bn was invested in ordinary shares; corporate debt securities had N72.1bn, money market securities N370.07bn and open/close end fund N12.41bn.
For real estate property, he said N167.89bn had been invested in the sector while N24.67bn was invested in unquoted securities.

He said the pension industry had generated an appreciable pool of long term funds, adding that out of the N2.86tn assets, the public sector had contributed N811.77bn representing 55 per cent, while private sector accumulated the balance of N1.57tn.
He said the regulation on investment of pension funds assets was revised to expand the allowable investment outlets to include alternative classes such as private equity funds, infrastructure financing fund and supranational bonds amongst others.

He added that the regulation for multiple funds such as ethical fund was being reviewed, while the one for onshore investment was currently being worked out.
Aminu, however, added that there was a need for capacity building infrastructural financing and private equity investments.
The commission had said plans were afoot to roll out a multi-funds structure to take care of retirement savings.
The funds would be classified into four categories namely aggressive fund, balanced fund, retirement fund and ethical fund.

The balanced fund is for those below 50 years of age and will have a lot of variable income security, equity fund, infrastructure fund and others, which have longer life span and higher risk.
All the funds have different variable fixed income. For instance, the aggressive fund has minimum investment in variable income of 10 per cent; the balanced fund has a variable fixed income of five per cent, while in the retirement fund, there is no variable fixed income.