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•Retirees face bleak future over looming slash in payments Over N243.75 billion of the N325 billion. 
invested in the capital market from the pension fund has been lost due to the decline that came with the global financial meltdown. And with a market rebound not in sight, workers due to retire in the next three years may have to bear the brunt as their lump sum payment and annuities slashed as the stock market decline continues.
The N325 billion represents 25 percent of the N1.3 trillion total collections by the Pension Commission (PenCom) that has been ploughed into the capital market.
The implication is that the workers who are denying themselves immediate luxury by making the mandatory monthly contributions of 7.5 percent of their salaries in the hope of having a blissful retirement life may be disappointed after all as the value of their contributions, invested in shares by the Pension Funds Administrators has nosedived by over 75 percent. 
For instance, the Nigerian Stock Exchange (NSE) All Share Index (ASI) at Wednesday’s trading session fell by 0.72 percent to close at 21,212.96 points compared with the depreciation of 0.70 percent recorded on Monday. The return on NSE ASI year-to-year (YTD) is -32.55 percent. The market capitalisation also depreciated by 0.72 percent to close at N5 trillion. 
Stockbrokers who spoke with BusinessDay revealed that in compliance with the provisions of the National Pension Commission, Regulation on Investment of Fund Assets of October 2008, section 5: 14, 25 percent of the funds have been invested in shares. 
In effect, if 25 percent of the total amount allowed by law has been fully invested in the market, then N325 billion would have been invested.
Consequently, investments in the capital market early last year when the market was experiencing a boom have lost substantial value, particularly for the workers retiring within the period under review.
Muhammad Ahmad, director general of the commission, said last week in Abuja that already, over N1.3 trillion has so far been collected under the scheme and that beginning next year, a substantial part of the fund would be invested in longer tenor securities in the bond market. Ahmad said that only 0.3 percent of the amount has been invested in corporate debt instruments, even though the law allows the commission to invest up to 30 percent. According to some analysts, this is an indication that the commission may have also been lured into the massive investments due to prospects of higher returns.
Analysts say pension fund administrators were greedy in the hey days of the market. According to sources, the PFAs were supposed by law to invest 30 percent of the total money in corporate bonds, but only about 0.3 or N39 million was invested in bonds. Experts believe investments in bonds are among the safest in the world and that the commission ought to have utilised other investment windows to the fullest as provided by the law.
Sanusi Lamido Sanusi, governor, Central Bank of Nigeria (CBN), also alluded to the fact when he appeared before the Senate for screening. “What happened to the stock market is a failure of risk management. Basically, you had a stock market that was an accident waiting to happen.  
“The NSE had equities and no debts. About 70 percent of the valuation of the Exchange is banking stock. Now, anybody can tell you upfront that this is an unsustainable structure. 
“The price earnings ratio was too high. Price to book was too high and we had a bubble that was bound to burst. It was just waiting for something to happen and when we had the crunch and money started going out, the market crashed. Now, we are approaching reasonable valuations; I do not think the market is ever going to go back to where it was. 
“I think what we need to do is to ask ourselves how we got here. How did we not realize that it was dangerous for banks to have this kind of exposure to the capital market? Why did we not have a limit on the exposure that banks could take on the capital market? What were the regulators doing when these transactions were taking place?” Sanusi had said. 
Responding to suggestions that the invested funds may have been lost, Ahmad assured that in stock markets all over the world, share prices go up and down. He expressed optimism that the market will pick up again and by the end of the day pensioners’ money would remain safe.
Other PFAs that spoke with BusinessDay under anonymity said their action was based on the instructions from the commission.
However, Francis Amsalem, a staff with a manufacturing company, said the development has shaken his confidence in the pension fund facility. “The implication of the whole thing is that despite all the denial, there is still no hope of a secured future for the Nigerian worker, at least for now.”