The National Pension Commission (PenCom) yesterday said a new Retirement Savings Account (RSA) multi-fund investment structure to combat challenges in the pension administration would be introduced on July 1.
Its Acting Director General, Mrs. Aisha Dahir-Umar, made the disclosure at a training session organised by the commission for journalists in Uyo.
Dahir-Umar, who was represented by Mr. Ibrahim Kangiwa, a Principal Manager, in the Investment Supervision Department, said the structure would first achieve the commission’s objective by aligning contributors’ risks and investments expectations.
“Secondly, it will match assets and investments for projections, analysis and reports. Thirdly, it will help in the diversification of pension fund portfolios as minimum limits are set for aggregate investments in variable income securities for each fund,’’ she said.
According to her, all Pension Fund Administrators (PFAs) have been directed to key into the structure.
She said the RSA Multi-Fund Investment Structure was categorised into four parts, namely Fund I, II, III and IV. The young contributors will be categorised under Fund I, the middle aged contributors will be categorised under Fund II, contributors close to retirement from age 49 and above will be categorised under Fund III.
“Retirees will be categorised under Fund IV. However, the investment regulation allows contributors to make alternative choice but on formal request to PFAs,’’ Dahir-Umar said. She said the commission was worried about incidences of high rates of withdrawals from Voluntary Contribution Schemes (VCs).
“However, the Commission issued a circular on VCs in November 2017 because the incessant withdrawals negated the main purpose of using such contributions to augment pensions at retirement.
“The policy laid down by the comments on VCs is that 50 per cent can be withdrawn once in every two years,’’ the acting PenCOM Director General said.