The Pension Fund Administrators (PFAs) have invested N12.14 trillion from the pension fund assets into Federal Government of Nigeria (FGN) securities which includes; bonds and Treasury Bills (TBs).
Of the N19.5 trillion, N12.14 trillion was invested in FGN securities of which bonds attracted N11.59 trillion; treasury bills N221.81 billion; agency bonds N14.86 billion; sukuk bonds N124.89 billion and green bonds N181.57 billion.
The FGN bonds are still promising relatively low interest rates of 19 per cent far below inflation rate, yet, pension operators find solace in FGN securities as they see it as the only secured investment window.
The N12.14 trillion investments translate to about 60 per cent of the N19.5 trillion pension assets as at January, 2024.
The investment value is an accumulation from 2004 when the Contributory Pension Scheme (CPS) was established, till January, 2024.
However, the pension fund manager’s investment in federal government securities has allowed the government to fund its expenditure as well as embarks on some capital projects through this local borrowing, even as Pension Fund Administrators (PFAs) continue to see this instrument as a safe and the best investment option which bulk comes from FGN securities.
It has been noted that was instrumental to the continuous growth in pension fund now at N19.5 trillion, despite the fact that government at the state and federal levels are not paying the monthly pension contributions of their workers as and when due.
Meanwhile, Oguche Agudah, the chief executive officer (CEO) of the Pension Fund Operators Association of Nigeria (PenOp), said, operators see FGN securities as a safe investment window with low risks, as opposed to other investment outlets, saying, the essence of the pension assets is to be able to pay contributors at retirement which is why Pension industry Investment Guidelines has been so strict on where pension funds can be invested.
The PFAs investment in FGN securities, he said, gave assurance that pension funds are in a safe investment basket as the fund cannot deplete and will be available when needed.
Disclosing that, over time, pension fund operators have profitably invested the pension assets such that it is yielding good returns on investment, he added that, pension fund administrators will continue to look for additional viable investment options permissible under the law, to grow the assets to ensure that pension contributions can get values for their investment.
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