Pension Assets Are Safe

Pension administration in this country had been chaotic with pensioners protesting all over the place. People made contributions under one pension scheme or another, but were not sure where their contributions were.

Many employees in the private sector were not covered by the pension schemes of their employers and many of these scheme were not funded. These and many more were the reasons the Board of Editors of THISDAY engaged Muhammad K. Ahmad, Director-General of the Pension Commission of Nigeria, as part of the THISDAY Monthly Interview Series.

The Stock market is reported to have lost some N3 trillion in the last six months. Considering that a lot of pension funds have been invested in the market, how safe are the owners of the funds and you as Pencom.

The pension funds are safe and I can tell you why. At the end of August, total pensioners funds was at N970 billion. Pension assets can be categorized into two main groups. The first is what we call Savings Account Funds.

These are contributions that individual employees under the scheme have made. Those who have opened an account, as at today, are 3.4 million Nigerians.

That fund is being invested by pension fund administrators, but not all the funds are invested in stocks. Under our investment regulation, the maximum that can be invested in stocks is 25 percent. In other words, about 80 percent of the funds are invested in fixed income, the money market, government securities, corporate bond and real estate.