Joseph Inokotong, Abuja
The National Pension Commission (PenCom) has raised the alarm that enormous pressure is being mounted on it to invest the N9.4trillion pension fund assets in new initiative.
PenCom said such demands run contrary to the enabling law, which only empowers it to issue regulations on investment of Pension Funds and Assets to guide the investment activities of licensed operators.
This Acting Director-General of the National Pension Commission, Aisha Dahir-Umar, disclosed this Tuesday in Abuja during her opening remarks at the 7th Conference for Directors of Pension Fund Operators.
Aisha Dahir-Umar said: “what is news, however, is the recent upsurge of clamour for deployment of pension funds to support several new initiatives in both the public and private sectors.
“Often times, such clamours are inappropriately pursued by its proponents. For instance, our enabling law, the Pension Reform Act 2014, only empowers the regulator to issue Regulations on Investment of Pension Funds and Assets to guide the investment activities of the licensed operators.
“The law does not allow the regulator to “approve” any specific instrument for mandatory investment by operators. Regrettably, the Commission is increasingly being inundated with requests for “clearance” of several business proposals to enable Pension Fund Administrators finance the initiatives with pension fund.”
She warned that while these developments may be indicative of the high level of acceptability and robustness of the Pension Reform, they also call for increased vigilance by both the regulator and operators against derailment from the main objectives of the Reform, which is the payment of retirement benefits as and when due.
Aisha Dahir-Umar pointed out that the pension industry in Nigeria is leading the initiative for the attainment of the critical national imperative for socio-economic development, which is the formation of long term domestic capital.
She called on the pension industry players to not only consolidate on the successes of the reform recorded this far, but also to build a sustainable pension industry that can effectively deliver on its primary social mandate of retirement benefits payment.
According to her, the Directors of companies operating in the pension industry, in discharging their functions, should be guided by the principles that would assist the sector to remain focused on delivery of the objectives of the pension reform. She added that this understanding, underscores the importance of the conference’s theme which is: “Driving Economic Development through a Sustainable Pension Industry”.
The conference also discussed the new National Code of Corporate Governance as it applies to the pension industry; the merits of incorporating the Economic, Social and Governance Principles (ESG Principles) in pension fundinvestment.
Participants were also informed of the features and implementation update for the new pension product, the Micro Pension Plan.
The Pension Directors’ conference is organised by the Commission in pursuant to its statutory mandate of promoting capacity building and institutional strengthening of licensed pension operators, as stipulated by Section 23(g) of the Pension Reform Act 2014.2.
The two-day Conference is the seventh in the series of such conferences introduced by the Commission to constantly update members of the Boards of Directors of licensed Pension Fund Administrators and Pension Fund Custodians on topical issues in the industry’s operating environment.
It provides ample opportunity for the directors to discuss, share ideas on areas of common interests and concerns within the industry. PenCom Acting DG stated that about 30,000 participants have enrolled in the micro-pension programme launched by President Muhammadu Buhari, in March this year.