Emmanuel OchayiThe contributory pension scheme has witnessed a remarkable surge to N17.66 trillion in total assets by the end of October 2023, as revealed by the National Pension Commission (PenCom) in its latest report.
This increase reflects a significant financial boost to the retirement savings system in Nigeria.
“This surge in assets is a testament to the consistent contributions made by both private and public sector workers,” stated Mr Oguche Agudah, CEO of PenOp, highlighting the role of workers in bolstering the pension funds.
A breakdown of the figures disclosed that a portion, about N11.42 trillion, was invested in Federal Government securities, showcasing a diversified investment portfolio managed by Pension Fund Administrators (PFAs).
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“We’re witnessing an encouraging growth trajectory in pension funds, attributable to prudent investment strategies,” emphasized industry experts in response to the unveiled figures.
The report titled ‘At the dawn of 20 years of pension reform, what are the gains?’ underscored that worker contribution accounted for 54 per cent, while investment returns accounted for 46 per cent of the entire pension funds, emphasizing the robustness of the system since its inception in 2004.
The Pension Reform Act mandates PFAs to manage these funds, held under the custody of Pension Fund Custodians, aligning with the reviewed investment regulations set forth by PenCom.
These regulations emphasize a multi-fund structure for the Retirement Savings Account, aiming to diversify and optimize investment options for contributors.
“With contributions consistently driving the growth of the pension assets, there is a strong emphasis on prudent investment management and diversification to sustain this upward trajectory,” highlighted industry insiders in response to the revised investment regulations.
The robust growth in pension assets continues to underline the significance of effective retirement planning, ensuring financial security for workers post-retirement while also stimulating the broader economy through sound investment practices.
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