Pension Funds are Well Secured, Says PenOp boss
The Chairman, Pension Fund Operators Association of Nigeria (PenOp) Mr. Mishahu Yola has said that pension funds under the Contributory Pension Scheme (CPS), being managed by the association are well secured.
Yola disclosed at a media briefing in Lagos that contrary to recent reports that part of pension fund managed by the fund administrators has been lost in some investment portfolios, the fund is intact and fund operators and custodians are careful in their choice of investment areas and have been operating according to legal directive on the funds investment.
“For anyone to talk about loss is mischievous. We have an environment and market that is not deep. You can see what is happening in the stock exchange. The market is not deep, if we are conservative,it is because the market dictates that we should be conservative. Given the shallowness of the market, you can agree that safety comes first.
“Assets are well protected, in 2008 during the crisis, pension fund in Nigeria lost little about three percent it is still a positive return,there has not been negative returns. Even what was written was not negative it only said you have not beaten inflation. But we have our own statistics to show that what they reported was not correct because on their own statistics that is not a good one, when you have 21 PFAs and some one is reporting on the status of only four that is not a good sample So we can say it any where that pension fund has been well protected”, he explained”.
According to Yola, after safety, the next thing is liquidity because people get paid with money.
On this he said, the PFAs are liquid, adding that measures have been put in place to ensure that they remain liquid.
He said in recent times, some contributors have been calling his office to confirm that their principal money is safe and that he has been responding in affirmative way.
“People have been calling saying I hope my principal is safe and we told them is not only principal there is return on investment”.
He said it is the responsibility of Pension Fund Administrators, custodians and even the regulator to ensure that there is transparency in the fund management and that pension money is well managed and kept because it is not a free for all money.
“Pension money is not the general public money,it does’t belong to PenCom, state and federal government,it does’t belong to PFAs, it belongs to contributors therefore must be well kept”, he added.
According to the PenOp Chairman, as a way of building the confidence of the public on the safety of their money, Penop has continued to engage the public in continuous interaction as way of creating close relationship and sharing information.
He said the association is doing this because it has discovered that communication gap between its members and the public brings unnecessary agitations on the safety of the contributed money.
He assured contributors that the pension fund operators are liquid because the law establishing the CPS put measures in place to ensure that operators remain liquid.
“Bear in mind also that there is the statutory reserve all of us operate.It is part of our profit by law twelve and half percent we have to keep it aside it is there for restitution in case there is loss in the fund so PenCom can say, pick from there and give out so is all there to protect contributors.
He however said the fundamental thing that has happened to the CPS is the introduction of the multi fund structure.
He said currently there is a proposal for four different types of funds in the system namely aggressive, Balance, Conservative and retiree fund structure.
He explained that the conservative fund is for those who are 50 to 59 years ,the balance fund is for those at the age of 49 and below while the aggressive structure is for those between the ages of 20 to 30 years and will be by choice.
There has been agitations by contributors over safety and payment of their contributed funds just as the fund managers have maintained that pension funds under their care is safe but should be managed and paid out under strict guidance and directive by the law.
Last week, there was serious misunderstanding between the management of FUG Pensions beneficiaries of the Union Homes staff Legacy scheme that it has used funds from the organisation’s existing staff pension scheme to sponsor political campaigns and is currently broke and unable to pay the funds to the Retirement Savings Accounts (RSA) of the beneficiaries .
Contrary to the above allegations, FUG pensions managers said the funds are intact with pension fund Custodians appointed to manage it but that it has no right according to Pension Reform Act to pay out the fund to the beneficiaries with out the approval of the industry Regulatory body the National PensionCommission(PenCom).