The first recorded drop in the value of pension funds has been disclosed by the National pension Commission. For an industry with pooled pension funds in excess of N12.299tr by January 31 2021, a drop from previous peak of N12.306tr for December 31 2020, a difference of N7bn, may be minimal but the previous uninterrupted record of increase no longer stands.
Pension fund operators did not welcome it as a new normal instead, they moved in swiftly to realign the shift the drop has caused; in the race to put corrections in place, investment managers have been drafted to the rescue to deploy skilled investment skills.
Situating investment managers in the midst of the drop are two top managing directors reflecting the response in the pension industry. According to them, corrective measures could be triggered to get back to increasing numbers again.
The managing Director, Fidelity Pension Managers Limited, Mrs. Amaka Andy-Azike, acknowledging how the industry has moved in to effect future corrections said: “The various fund managers are already rebalancing their portfolios to manage the impact of the market risks.”
Speaking on the grounds covered Andy-Azike said: “Investments are geared towards areas with more values and lower risks to help recoup the lost grounds. The rise in yields has also provided better levels for new investment.”
Still building on the line of measures to correct future repeat, the managing director, Access Pension Fund Custodian Mrs Idu Okwuosa, said the pension industry is not skipping the drop challenge. “Investment managers in the industry continue to look for creative ways to add value to contributors. Considering that interest rates fluctuate, it will be nearly impossible to avoid such.”
Emphasising what this the tough challenge means for the industry Fidelity Pension Managers chief executive officer said every investment in financial instruments is exposed to market risks. The call up from this she remarked, is that: “The ‘ups’ and ‘downs’ in the financial market are part of the risks as the economy grapples with growth and recession.”