From Joseph Inokotong, Abuja
The National Pension Commission (PenCom) has introduced a Non-Interest Fund (Fund VI) and issued an Operational Framework for the Fund to provide investment portfolio choices to pension contributors and retirees.
The PenCom management said that the Fund is in furtherance of the implementation of the Multi-Fund Investment Structure which seeks to provide investment portfolio choices to pension contributors and retirees.
According to PenCom, the ‘Non-Interest Fund is a fund that complies with the provisions of Islamic Commercial Jurisprudence and any other established non-interest principles, as approved by the Financial Regulation Advisory Council of Experts (FRACE) or any other body constituted by the Central Bank of Nigeria and the Securities and Exchange Commission, from time to time.’
It added that the FRACE has certified that the Operational Framework issued by the Commission complies with non-interest (Shari’ah) finance principles.
‘All Pension Fund Administrators (PFAs) are required to create and maintain the Non-Interest Fund (Fund VI) for interested Retirement Savings Account (RSA) holders,’ PenCom said.
According to the PenCom, the Fund shall be separated into two funds for Active RSA holders and Retirees respectively.
‘RSA holders in Fund I, II, III and retirees in Fund IV are eligible to move their RSA contributions to the Non-Interest Fund (Fund VI) by making a formal request to the PFA, in line with the provisions of the RSA Multi-fund Implementation Guidelines and Section 7.6 of the Investment Regulation dealing with Transfers between Fund Types within a PFA,’ PenCom further stated.
The Non-Interest Fund offers a viable alternative to the conventional interest-based financial instruments for pension funds investment.
PenCom management stated that further information on the Non-interest fund (Fund VI) can be obtained from the Commission’s website at:www.pencom.gov.ng as well as the various Pension Fund Administrators (PFAs).