PenCom refutes claims of lending the Federal Government N10 trillion
The Director General of the National Pension Commission, Aisha Dahir-Umar, refutes claims that the commission loaned N10 trillion to the Federal Government. Dismissing the allegation, Dahir-Umar emphasized that PenCom is not a bank and does not store or manage pension funds. She clarified that the Federal Government did not borrow N10 trillion from the commission.
She stated, "PFAs' investments in the Federal Government of Nigeria's securities are not loans, as inaccurately depicted, but rather investments in securities, specifically bonds and treasury bills, sanctioned by relevant government agencies such as the Debt Management Office and Securities and Exchange Commission. These securities are traded on authorized capital markets, namely the Nigerian Exchange Limited and FMDQ OTC Securities Exchange."
She clarified, "Additionally, PenCom does not manage pension fund assets. I have consistently emphasized that when we report pension assets growing to N19.6tn, it does not imply that PenCom has N19.6tn physically stored in its office or bank accounts. Pension fund assets are overseen by licensed PFAs and securely held by licensed Pension Fund Custodians.
"The PFAs are responsible for prudently investing pension fund assets in approved asset classes, including FGN debt instruments. The primary goals are to ensure safety and reasonable returns. These actions align with the provisions of the governing law, the Pension Reform Act 2014, and the regulations issued by the commission. It is evident that what is labeled as a 'loan to FGN' is essentially an investment in FGN securities by PFAs, a practice followed by other institutional investors like banks, insurance companies, asset managers, and others."
Addressing assertions that PenCom owed arrears of pensions to federal government retirees, Dahir-Umar contended that the Federal Government had consistently fulfilled its repayment obligations.
The PenCom DG further clarified claims regarding outstanding benefits for Federal Government retirees, stating, “The delayed payment of retirement benefits to some Federal Government retirees and deceased employees is due to the inadequate and delayed funding for the payment of Accrued Pension Rights for those who were in service before the introduction of the Contributory Pension Scheme when PenCom was established in 2004.
Payment of the accrued rights is subject to the release of funds by the Federal Government. So, it is beyond the powers of the Commission. However, we have been engaging the Federal Ministry of Finance for more funds to be released to settle these liabilities, but it is not a secret that the government itself has budgetary constraints.”
She mentioned that all those enrolled under the CPS had been receiving their benefits through their PFAs, and there were no outstanding complaints before the commission. The total assets under the Contributory Pension Scheme reached N18.36tn by the end of 2023.
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