25 May 2015, Abuja – The Chairman, Pension Fund Operators Association of Nigeria, Mr. Misbahu Yola, has said the drop in global oil prices will not have any negative effect on the country’s pension fund assets.
Yola, who is also the Managing Director, Legacy Pension Limited, stated this during an interview in Abuja shortly after a stakeholders’ meeting with the Nigerian Pension Commission.
The total assets under the Contributory Pension Scheme rose to N4.61tn at the end of the 2014 financial year from N2.05tn in the preceding year.
The country had in the last few months experienced a 50 per cent cut in revenue owing to the drop in oil prices.
For instance, in the first three months of this year, a total revenue shortfall of N1.31tn was reportedly recorded.
But Yola said that despite the drop in revenue, the Federal Government would still find a way of meeting its obligations of paying salaries, noting that once salaries were paid, the amount meant for pension funds would be remitted.
He said, “The federal budget has been adjusted. Recurrent expenditure is still high and this shows there is no effect (drop in oil prices) in paying salaries. Salaries will be paid because there is no cut back on salaries based on the budget that has just been approved. And if there is no cut back on salaries, then there will be no cut back on pensions.
“For the private sector, they are not directly affected by the drop in oil prices. Private sector has different challenges ranging from power to infrastructure; but these won’t stop them from contributing to pensions.”
He said that the investment guidelines put in place by the commission had ensured a diversified structure for the fund to guarantee safety and liquidity.
For instance, he said about 50 per cent of the money in the Retirement Savings Accounts had been invested in Federal Government bonds; while 11 per cent had been invested in equities.
Yola noted that with the signing into law of the Pension Reform Act 2014 by President Goodluck Jonathan, the regulator of the pension industry now had wider powers to ensure compliance.
He said the commission, through the appointment of recovery agents, had been able to recover about N7.5bn from firms that had not been remitting the pensions of their employees.
He said, “The primary enforcement is on the commission because we don’t have the powers. But you see from 2014 PRA, the commission has got more powers in terms of prosecution and ensuring compliance.”