Poorly defined rules and strategies, as well as lack of co-ordination, are factors responsible for non-investment of part of the N3 trillion Pension funds in infrastructure, according to Mohamed Ahmad, outgoing director-general of the National Pension Commission (PENCOM).
Ahmad, who is due to retire this month, after eight years as the pioneer director-general of the Commission, also said lack of long term investment instruments was responsible for the major investments of the assets in equities.
He added that recent calls by some Nigerians for investment of the funds in infrastructure was ideal, but added that this could not happen without defined regulations guiding such investment.
He also spoke of the need for collaboration between ministries and departments and the Infrastructure Concession Regulatory Agency (ICRC) among others.
He said concessionaires should come out with strategies, while the private sector should be in the vanguard, through identification of viable projects, adding that the Commission would not delve into such areas until the operational environment was ideal.
Ahmad, who expressed satisfaction with the performance of the Commission, said that regulation on investment of Pension Fund Assets was being revised, to expand the allowable investment outlets to include alternative asset classes.
He listed such to include Private Equity (PE) Funds, Infrastructure Financing (Debt Instruments and Funds) and Supranational Bonds, amongst others. Regulation, he said, was still under review, while multiple funds would be established.
Ahmad listed his achievements to include, nurturing of the Commission to the present state, where workers are able to save; receive their retirement benefits as and when due, which by extension is contributing economic development.
This, according to him, has resulted in the establishment of the platform to explicitly and accurately budget costs of pensions, resulting in fiscal sustainability.
He further listed the recent setting up of transitional arrangements for both the public and private sectors, on how to handle old schemes.
The outgoing director-general said about 21 state governments had adopted the compulsory pension scheme (CPS) while 14 others were working towards it, with over five million Nigerians registered as at September.
He also revealed that work has reached an advanced stage to establish fully functional zonal offices for the Commission, with over 180,000 employers of labour hooked up to the scheme.
While advocating continued government support for the scheme, Ahmad said consistency in policy, particularly as it relates to pension related issues should be encouraged.
He also listed some of the challenges to include lack of adequate knowledge about the workings of the CPS, multiple registrations and lack of clear identification of RSA holders.
He said the scheme was further challenged by delays in remittance of contributions, occasioned by non-submission of nominal rolls by the MDAs, and non-submission of updated and/or incomplete nominal rolls indicating changes in grades and levels, resulting in non-remittance of right contributions into RSAs.
On the funding of Public Sector Accrued Rights, the outgoing DG said that the 5 percent of the Federal Government’s wage bill being paid into the Retirement Benefits Bond Redemption Fund (RBBRF) Account was insufficient to upset the additional claims arising from early exit occasioned by voluntary and mandatory retirements or death.
However, Ahmad noted that considering the environment they are operating in, and the fact that the misconception had built up about the old scheme, the Commission has performed well.