Nike Popoola
Operators of the Contributory Pension Scheme are looking at how to extend the investment of the increasing pension funds to airport projects in the country and other large investment areas.
The total pension funds stood at N8.09tn as of the end of April, according to the National Pension Commission.
The Managing Director, Sigma Pension, Mr. Dave Uduanu, who stated this while responding to questions from our correspondent, also said the operators were working with development finance institutions on how to create support for investible projects.
“The pension operators are looking at forming a consortium in such areas for investment because those are large-scale investments which are beyond the capacity of any one pension fund,” he said.
Uduanu, who noted that more of the funds should be invested in the real sector of the economy, stated that there should be supply of instruments of listed companies and quality infrastructural instruments.
The Acting Director-General, PenCom, Ms. Aisha Dahir-Umar, said pension funds had improved the saving culture of workers and constituted a pool for investment.
According to her, the sector contributed about 6.54 per cent to the country’s gross domestic product as of March.
Dahir-Umar added that the fund had provided capital that further deepened the financial markets.
The PenCom boss noted that pension fund was available for development of infrastructure as a veritable step to enhance economic development.
She also explained that about N259.58bn was transferred to the insurance industry in exchange for the monthly annuity of N2.5bn to 51,819 retirees as of March.
The President, Chartered Insurance Institute of Nigeria, Mrs. Funmi Babington-Ashaye, said even though Retirement Savings Accounts were managed by Pension Fund Administrators, on retirement, employees had the option of programmed withdrawal or purchasing annuities from life insurance companies licensed by PenCom after receiving a lump sum payment from the PFAs.
According to her, this presents a huge business potential for insurance companies if well harnessed.
She said, “Annuity and pension funds constitute a major source of institutional investments in Nigeria. Such funds, because they are long term in nature, can be channelled for development of much needed infrastructure in Nigeria.”
Such infrastructure, she added, included transportation, communication, water and electrical systems.
The CIIN boss said continuous interactions with the stakeholders in the pensions business was necessary so that the huge potential associated with the business could be harnessed.
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Source: Punch
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