Mrs. Chinelo Anohu-Amazu, DG, NPC
The Contributory Pension Scheme operators are considering investing part of the pension funds in long-term projects.
The total pension funds being managed under the CPS stood at N4.9tn at the end of May 2015.
Statistics on the Retirement Savings Account registration by age and sector obtained from the National Pension Commission revealed that most contributors to the CPS were less than 40 years old.
According to the Pension Reform Act, 2014, only workers who have retired and are up to the age of 50 years can access the retirement funds under the pension scheme.
“An age distributional analysis of the RSA holders revealed that the largest proportion of the RSA holders is very young as almost 80 per cent of the members are below 50 years, and 51 per cent of the members are below the age of 40 years,” PenCom stated.
Under the guideline on investment, PenCom stated that pension fund assets could be invested in infrastructure through infrastructure bonds or infrastructure funds and that both outlets must meet the conditions for the investment of pension funds in infrastructure before the Pension Fund Administators could channel pension fund assets into such investments.
“The infrastructure project shall be not less than N5bn in value and awarded to a concessionaire with good track record through an open and transparent bidding process in accordance with the due process requirements set out in the Infrastructure Concession and Regulatory Commission Act and any regulation made pursuant thereto, and certified by the Infrastructure Concession and Regulatory Commission and approved by the Federal Executive Council,” it stated.
Another condition for the investment is that the projects must have business plans and financial projections that indicate they are viable as well as economically and financially rewarding.
It added:“Where infrastructure projects are financed through infrastructure funds, the value of the infrastructure fund shall not be less than N5bn and the infrastructure fund must have a well defined and publicised investment objectives and strategy as well as disclosures of pricing of underlying assets, including any other necessary information,” it stated.