Leadership (Abuja)
Justus Nduwugwe
9 November 2009
Abuja — The National Pension Commission has revealed that about 3.9million employees have registered with various Pension Fund Administrators (PFAs), while over N1.3trillion pension assets have been generated as at the end of September, 2009.
This was made known yesterday by the Director General of PENCOM, Alhaji Muhammad K. Ahmad, at the seminar on reviving Nigeria 's non-governmental bond markets, jointly organised by PENCOM, Securities & Exchange Commission (SEC) and the IFC/World Bank in Abuja .
The DG noted that the rising public confidence in the contributory pension scheme was responsible for the rise of the pension assets from N1.1trillion recorded as at the end of December, 2008, to the present level of N1.3trillion. He further noted that there is a growing concern about the dearth of investment outlets for pension funds in Nigeria.
"The current situation wherein most of the pension funds are chasing very few quality investment instruments has created a glut of funds in the financial market, with about 37 per cent of the assets invested in money market instruments as at 30 September, 2009," he added.
According to him, "This is further complicated by the fact that there are very few issuers of corporate bonds, while some large corporations in the country are not listed on the Stock Exchange, thus denying pension funds the opportunity of investing in their stocks".
He further stated that notwithstanding some of the modest achievements, the Commission had to contend with a number of challenges, including the need to adopt a more risk- based supervisory framework given the rapid growth of the pension industry.
In his words, "The need to widen the coverage of the scheme to include small scale enterprises and the integration of the informal sector into the scheme, had remained very herculean and difficult due to the sector's lack of coherent structure and unwieldy composition as well as absence of data about employees. "A dynamic investment regulation is required to address the emerging challenges of investing pension assets. Given the complex nature of the pension industry, there is also an urgent need to improve the capacity of both the operators and the regulator," he added.
With regard to securing wider coverage of the pension scheme, the PENCOM boss observed that while many employers in the informal sector are joining the new scheme, a large number is yet to commence implementation.
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