The Pension Funds Administrators have raised their investments in infrastructure to N11.36 billion from the pension money in their custody.
The latest report by the National Bureau of Statistics (NBS) on the PFAs investment profiles indicated that the N11.36 billion committed to infrastructure projects was as at end of the second quarter of this year.
The NBS stated in its ‘Pension Asset and Membership Data’ that the total funds under the Contributory Pension Scheme stood at N8.23tn as of the end of June.
The Federal Government, which is the biggest borrower of the funds, has 70.75 per cent or N5.8tn of the total assets in its custody.
The NBS’ report showed that the Federal Government had invested N4.04tn, N1.7tn, N8.35bn, N58.36bn and N7.7bn in the Federal Government of Nigeria bonds, treasury bills, agency bonds, Sukuk bonds and Green bonds.
It added that a total of N151.95bn of the funds was invested in state government securities.
According to the NBS, the pension asset and Retirement Savings Account membership data for Q2, 2018 showed that 8,136,202 workers were registered under the pension scheme, compared to 7,975,976 registered workers in Q1 2018; while the pension fund asset under management as of Q2, 2018 stood at N8.232tn as against N7.943tn in Q1, 2018.
FGN bonds had the highest weight percentage of 49.08 per cent of the total pension fund assets and closely followed by treasury bills with 20.76 per cent; and domestic ordinary shares with 8.62 per cent, while green bonds had the least with 0.09 per cent weight.
The data revealed that participants within the age distribution of 30-39 years had the highest percentage composition, closely followed by participants within the age bracket of 40-49 years and 50-59 years, while participants above 65 years had the least percentage composition.
Other figures obtained from the National Pension Commission on investment in infrastructure revealed that in May 2015, the operators invested N568m in infrastructure and increased it to N1.35bn in December 2015.
The PFAs invested N2.06bn in infrastructure bond in December 2016, and had gradually increased the pension funds invested in the portfolio.
For instance, PenCom’s data showed that the PFAs invested N6.86bn in the nation’s infrastructure as of December 2017.
Operators of the CPS are looking at how to extend the investment of the increasing pension funds to airport projects in the country and other large investment areas.
According to the Managing Director, Sigma Pension, Mr Dave Uduanu, the operators are 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 Director-General, PenCom, Aisha Dahir-Umar, said the CPS had facilitated a pool of pension funds which had consistently accumulated since its inception.
She said there was enormous potential for the growth of Nigerian pension funds to account for a significant proportion of the Gross Domestic Product.
“The commission’s ongoing strategy implementation aims to attain an increase in the ratio of pension funds to GDP to at least 10 per cent by 2019,” she said.