Odutola: Pension Assets Can Bridge Infrastructure Gap

The Managing Director of ARM Pensions, Mr. Wale Odutola, has said that it will remain a strange development for the quantum of assets amassed in the last 10 years of administering standard pension regime in Nigeria to ignore obvious opportunities in gaps within the country’s infrastructural base.

Odutola said at a recent meeting of his company with Pension Department Officers (PDO) in Abuja that with the amount of assets in the pool of the pension scheme, the pension industry should be able to contribute immensely to closing up Nigeria’s infrastructure gap.

Nigeria’s Pension Commission (PenCom) in October 2014 disclosed that the country’s pension assets had hit N4.6 trillion, comprising of domestic ordinary shares, foregn ordinary shares as well as federal and state governments’ securities.

Odutola however noted that a careful application of this fund could alleviate Nigeria’s infrastructural challenges.

He said when asked what sector of the country’s economy could need the pension assets more: “The obvious one is the infrastructure and a lot has been said over the last six to 12 months about how pensions can contribute to the development of infrastructure in Nigeria.”

“Clearly, as we all know, there is a major lack when it comes to infrastructure in Nigeria and it is odd that you should have an industry aggregate so much capital and will not be able to contribute to the alleviation of that lack. The pension fund regulator is doing quite a lot in that area and as we know, PenCom’s primary constituency is the contributors and whatever they do, they must ensure that there is safety in the contributions,” he said.

Odutola further said: “I believe what they (PenCom) are doing now is to ensure that the right framework is available for pension funds to make investments in infrastructure. Clearly, anything that improve infrastructure will improve the economy and make sure that more jobs are created.

We are very much in support of the initiatives around allowing pension funds to help alleviate the infrastructure deficit within the country.”

Speaking on the recent amendments to the Pension Fund Act (PFA), Odutola explained: “I think when the initial Act that was promulgated in the early 2000, it was ground breaking and never have we seen an industry accumulate as much capital as the pension industry has accumulated over 10 years and so clearly, there is something that is right that is being done.

But as circumstances changes, changes are being done to cater for things that were not captured in the former Act and hopefully secure pensions as we go along into the next 10 years.”

“Our belief is that the amendments are well timed and will improve the industry as we go along. Some of the amendments relate to quantum of contributions and what that means is that you are able to save more.

I expect that as the years go on, we will continue to see improvements in the law and that will also ensure safety of pension funds to make the industry grow faster,” he noted.