Pencom denies lending government N10 trillion

DIRECTOR General of National Pension Commission ( Pencom), Mrs Aisha Dahir- Umar, has described as “totally misleading” reports that the Commission gave a N10 trillion loan to the Federal Government.

She also responded to claims that Pencom owed Federal Government retirees arrears of pensions and insinuations that Pension Fund Administrators ( PFAS) were not fulfilling their obligations to retirees with regards to access to their retirement savings.

Dahir- Umar, in a media interview at the weekend, said: “Investments by PFAS in the securities of the Federal Government of Nigeria are not loans as erroneously portrayed, but investments in securities, through bonds and treasury bills, as approved by relevant government agencies, in this case the Debt Management Office ( DMO) and Securities and Exchange Commission ( SEC).

“Moreover, pension fund assets are not managed by Pencom. I have said it repeatedly that when we say pension assets have grown to N19.6 trillion, that does not mean Pencom has N19.6 trillion locked somewhere in its office or bank accounts. Pension fund assets are managed by the licensed PFAS and held in custody by the licensed Pension Fund Custodians ( PFCS). The PFAS are responsible for investing pension fund assets in allowable asset classes, including FGN debt instruments. “The objectives are safety and fair returns. All these are in line with the provisions of the enabling law, the Pension Reform Act 2014, and the rules issued by the Commission. It is obvious from the above that what is referred to ‘ loan to FGN’ is just investment in FGN securities by the PFAS, as is done by other institutional investors such as banks, insurance companies, asset managers, etc.”

Dahir- Umar added that it was an international best practice to invest in investible instruments issued or backed by the sovereign authority and that the FGN securities meet the objectives of safety and fair returns.