Investment Returns On Pension Fund Assets Hit N2.7trn
The cumulative investment returns on the nation’s N14.5trillion pension fund assets may have risen to about N2.7 trillion, translating to about 19 per cent of the entire pension assets, LEADERSHIP can exclusively reveal.
Although, it is quite difficult to calculate and get the exact returns on investment of pension assets, market sources put the returns slightly above N2.7 trillion from 2004 till now, which they said, were largely driven by investments in bonds market, with 70 per cent of the assets invested in federal government bonds and securities.
According the 2021 annual reports of the pension industry released by the National Pension
Commission(PenCom), the investment income on pension assets in 2020 was N122.03 billion while N120.24 billion was realized as investment income in 2021 financial year.
In the last 10 years, however, market observers disclosed that the annual investment returns on pension fund assets had hovered between N100 billion and N150 billion, depending on the investment cycle and climate, believing the cumulative investment returns since the inception of the scheme in 2004, should be in the region of N2.7trillion. This would mean that the industry annual average growth is around N150billion.
While most of the funds were invested in bonds, a drastic fall in bond yields in 2020 has got pension operators thinking twice before reinvesting their matured Funds in the bonds, hence, found investment haven in the capital market then and currently, bank placements.
Investigation shows that, as at the end of August, 2022, pension funds managers have invested N2.27trillion from the 14.5trillion into money market instruments comprising of fixed deposits in banks, commercial papers as well as Foreign money market instrument.
While investment of pension fund in fixed deposits took the larger chunk of this investment accounting for N2trillion, commercial papers accounted for N157.7billion even as foreign money market instrument was N39.9billion as at the end of July, 2022.
In the review of the Monthly
Unaudited Report on Pension Fund Industry Portfolio released by the National Pension Commission(PenCom) for the months under review, findings show that more than 90 to 92 per cent of the investments under Money Market instrument category went into Fixed Deposits, showing increased interest from pension fund operators as it gave better returns on investments of the N14.3trillion pension fund assets.
Fixed Deposits also known as Bank Placement or Acceptance is a short term investment instrument used by corporate organisations, such as Pension Fund Administrators(PFAs) to place fund in banks or other financial institutions at an agreed interest rate and tenor.
Following the severe damages often caused by flood to the existing rice varieties, the National Agricultural Seeds Council (NASC) yesterday called on Nigerian farmers to adopt the new flood tolerant rice varieties to address yield losses.
The innovative FARO 66 and 67 are improved varieties earlier released in 2017 by the Africa Rice and are suitable for planting in flood prone rice growing zones in Nigeria with potential to yield up to 80 and 10 times higher than their parent varieties.
Additionally, the varieties have been breed to withstand water submerge, reach maturity within 120-125 days with yield capacity of 6.6 and 6.7 tonnes per hectares respectively and are resistance to stem borers, bacteria leaf blight and African rice gall midge disease.
Their development came with technical support from the Korea-Africa Agriculture and Food Cooperation Initiative (KAFACI) currently running in 16 other African countries.