The National Pension Commission (PenCom) has said that pension managers’ investment in federal government’s instrument yielded interest of N77.79 billion in 2020.
The interest peaked at 82.02 per cent of the total interest yield during the year under review
The huge investments made by Pension fund managers in federal government securities have continued to yield optimal results, PenCom revealed
PenCom in its 2020 industry report published in its website revealed that the managers invested a total of N5.74 trillion in federal government securities in 2020.
The yield, according to PenCom, represents an improvement on the 80 per cent interest yield reaped by the managers in investment of pension funds in federal government securities in the year 2019.However the overall yield witnessed N5.282 billion decline.
Since the inception of Contributory Pension Scheme in the year 2004, the Pension fund managers and Pension Fund Custodians who manage and invest the funds have always seen federal government securities as safest place to invest pension funds.
Despite stakeholders’ outcry on the need to invest the funds in infrastructural development, over 70 pension of the funds is invested in federal government securities.
The FGN securities favoured by the pension managers include bonds; treasury bills; agency bonds; Sukuk and green bonds.
PenCom explained that fluctuation in interest yields in federal government securities was what forced the overall interest yields to the industry’s investment to slide by N5.282 billion to stand at N773.70 billion for the year under review against N816.84 billion in 2019.
PenCom maintained that the total investments in FGN Securities was N5.74 trillion as at 31 December 2020, adding that the maturity profile of the investments in FGN Bond ranged from 1 to 10 years and represented 68.78 per cent of the portfolio value of the RSA Active Funds and that 91.58 per cent of the Funds investment in FGN securities were in FGN bonds.
“A review of the Bond Portfolio reveals that pension fund assets of Funds I and II are equally split between tenures below and above 10 years. However, in line with the demography of Fund III contributors, investments in FGN bonds were mostly in short to medium term (below 10 years) maturity bucket that accounted for 60.89 per cent of the Fund’s FGN bond portfolio.