Pension Funds Encounter First Waterfall

The Contributory Pension Scheme which had maintained a steady rise since inception as the fastest growing fund in the economy encountered the first drop in the national pension fund pool. The fund dropped by N7bn in January 2021, recording N12.299tn from N12.306tn recorded in December 2020. The CPS was introduced through the Pension Reform Act which commenced in 2004.

This is contained in the National Pension Commission’s report titled ‘unaudited report on pension funds industry portfolio for the period ended 31 January 2021’ disclosed on Thursday. Data for months coming after January will show if the funds will gather momentum as water does after a waterfall.

The current report showed figures on Approved Existing Schemes, Closed Pension Fund Administrators and RSA funds (including unremitted funds).

The bulk of the funds were invested in the federal government’s securities. According to the figures, in January, N8.1tn was invested in FGN securities including FGN bonds, treasury bills, agency bonds SUKUK and green bonds.

Other investment portfolios were domestic and foreign ordinary shares; corporate debt securities comprising of corporate bonds, corporate infrastructure bonds, corporate green bonds and supra-national bonds.

PenCom report noted that RSA registration as at December 31 2020 was 9,215,788; it moved up by 21,053 to close at 9,236,841 as at January 31, 2021.