The National Pension Commission (PenCom) has said that the Non-interest pension Fund assets grew to 17.75 billion at the end of January, from 7.79 billion recorded at commencement in September 2021 .
PenCom, in a bulletin on its website on Tuesday in Lagos said that the fund translated to a growth of 9.95 billion over the period of five months .
Section 7.3 of the Regulation on Investment of Pension Fund Assets issued by PenCom, established the Non-Interest Fund (Fund VI) among the Fund types to be managed by licensed PFAs.
It is a fund which complies with the provisions of Islamic Commercial Jurisprudence and any other established non-interest principles, as approved by the Financial Regulation Advisory Council of Experts (FRACE) or any other body constituted by the Central Bank of Nigeria (CBN) and the Securities and Exchange Commission.
According to the Commission, the Non-interest Fund have been received with great enthusiasm by pension contributors and retirees.
“As enlightenment efforts are intensified by the commission and Pension Fund Administrators, it is expected that the growth of the Non-interest Fund will be sustained, ” it said.
PenCom explained that Non-interest Fund is optional to pension contributors and retirees.
“Consequently, RSA holders in Funds I, II, III and retires in Fund IV are eligible to transfer their RSA contributions to the Non- Interest Fund (Fund VI) by making a formal request to their PFA in line with the provisions of the RSA Multi-fund Implementation Guidelines and Section 7.6 of the Investment Regulation dealing with Transfers between Fund Types within a PFA.
“Therefore, eligible RSA holders are required to visit their respective PFAs to request for the transfer of their pension funds from their existing fund to the Non-Interest Fund by completing and signing a Consent Form to be issued by the PFA.
“The personal presence of the RSA holder is required due to the need for authentication. Consequently, regardless of how the consent form is made available, the process cannot be concluded until the RSA holder visits the PFA and appends his or her signature to the form.
“Thereafter, the PFA will move the funds from the existing fund to the Non- Interest Fund and advise the RSA holder accordingly.
The commission stated that in order to boost confidence amongst pension contributors and retirees, FRACE has certified that the operational framework issued by the commission complies with non-interest finance principles.
PenCom noted that some of the objectives of the operational framework issued by commission include: to promote financial inclusion within the Nigerian Financial System , to establish standards and procedure for the
management of Fund VI by licensed PFAS.
It also said that the operational framework will promote Islamic Finance thus bridging the access to finance gap in Nigeria and assist in expanding the coverage of the CPS by attracting employees who are interested in non- interest funds.
“Sequel to the issuance of the operational framework by PenCom, all PFAs were required to create and maintain the Non-Interest Fund for interested RSA holders.
“The Fund shall be separated into two funds, for active RSA holders and retirees, respectively.
“The permissible instruments for the investment of Fund VI assets include: Corporate/ Supranational Sukuks, Government Sukuk Bills (including Islamic Treasury and Euro Sukuk) issued by the Federal Government of Nigeria, CBN or FGN Agencies, Infrastructure Sukuk backed by FGN/ CBN guarantee.
“Other instruments are compliant Money Market instruments, ordinary shares, private equity Funds and real Estate funds,” PenCom said.
