How We Recorded N2.4tn Growth On Pension Assets In Two Years – PenCom

The National Pension Commission (PenCom) says the major factor that led to a 37.4 percent increase in pension assets from N6.42 trillion as at the end of March 2017 to N8.63 trillion as at December 2018 is enforcement of compliance.

Recall that the commission revealed that pension fund assets as at 30th November 2018 rose to N8.50 trillion which it attributed the development to 17 broking firms who contributed and remitted over N426.36 million for their employees in 2018, and also Contributory Pension Commission (CPS) whose membership grew to 8.41 million contributors as at December 2018 with a total of 260,808 retirees receiving regular monthly pensions.

Throwing more light on the N2.4 trillion growth, the Acting Director-General of PenCom, Mrs. Aisha Dahir-Umar, said upon her assumption of duty in April 2017, her team restricted the Commission’s priorities to focus on some fundamental aspects of the Contributory Pension Scheme (CPS).

“The Commission, thus, renewed impetus on ensuring the safety and growth of the pension fund assets through its strict enforcement of the Investment Regulations.

“The security of pension assets remains a significant indicator of the effectiveness of the CPS. It is indeed gratifying to note that pension assets increased from N6.42 trillion as at the end of March 2017 to N8.63trillion as at December, 2018. This indicated a growth of N2.4trillion (37.4 per cent) over the period,” she said.

She noted that during the period, there were several efforts made by the Commission to enhance its growth, stressing that there were emphasis on coverage expansion, due to enhanced enforcement of compliance.

Dahir-Umar further said the commission engaged a continuous strategy to recover pension contributions from non-compliant organisations, and also to cover more workers into the Contributory Pension Scheme through intensive education and awareness of the public.

“Furthermore, the Regulation on Investment of Pension Fund Asset was reviewed to introduce the Multi-Fund Structure for RSA Funds. This entailed the segregation into various Funds that are structured demographically to fit the risk appetite of contributors.

“The initiative allows the Funds to be invested in more alternative instruments, which would enhance return on investments,” she added.

She said the Commission also went further to implement a reduction in fees charged on the pension funds, stressing that the new fee structure was focused on the need to reduce the costs to pension funds and thus enhance returns to beneficiaries.

Meanwhile, the acting DG noted that the commission is in talk with relevant stakeholders to implement the 10 per cent employer and 8 per cent employee rates of pension contributions which she said help the commission further boost the growth of pension assets thereby, providing a more comfortable livelihood at retirement