Confidence In Federal Might Puts FGN Bonds In Sure Place For Pension Assets

The confidence in the guarantee of Nigeria Federal might has become the signature for secure pension fund assets and with it, the future of pension funds for retirees is out of bounds to funds collapse.

With legal boulders in place in the Pension Reform Act PRA 2014 to reinforce the security of pension funds and higher level of security wired into federal government securities, it has remained the first choice for investment of pension funds. Therefore, it takes the chunk of pension funds investment.

In the Third Quarter 2022 Report of the National Pension Commission (PenCom), the total value of pension fund assets as at 30 September 2022, was N14.42tr.

The fact sheet show that N10.31tr of these assets were contained in retirement savings account RSA ‘active’ funds (ie RSA funds I, II, III and V) while N1.15tr was assigned to RSA fund IV; N1.49tr in CPFAs; and N1.44tr in approved existing schemes. The combined fund VI active and retiree fund had the least fund portfolio with N32.68bn because the fund owners mainly retirees and are not active players in the risk prone investment space.

The report stated that pension fund assets were mainly invested in federal government securities where the sure mark spirals and, it accounted for 63.7% of total assets.

The composition of investments in FGN securities were as follows; FGN bonds, 95.78%; treasury bills, 2.02%; agency bonds, sukuk and green bonds accounting for 2.20%.