PFAs’ investment in real estate drops by 0.23%
As pension assets under the Contributory Pension Scheme (CPS) rises to N9.99 trillion, indication has emerged that the Pension Fund Administrators (PFAs’) investment in real estate properties has dropped.
Although no immediate reason has been given for the decline, a report obtained by this newspaper showed that the commitment to the segment by the fund managers dropped by 0.23 per cent in the last quarter of last year.
According to the breakdown, while the sum of N243.59 billion was invested in October, representing 2.48 per cent of the total assets, the sum of N224.63 billion was put into real estate in November, representing 2.25 per cent.
A further breakdown also revealed that Federal Government securities as usual gulped the highest investment commitment from the PFAs with over 70 per cent, amounting to N7.082 trillion just as the PFAs raised their investment in infrastructure to N40.52 billion as of November, last year.
An analysis of the data showed that while the Federal Government’s securities took a huge chunk of the pension assets, state government bonds and corporate bonds took the balance of 29.12 per cent.
A breakdown of the figures showed that the highest amount of N4.86 trillion was invested in the Federal Government’s bonds alone.
This was followed by N2.1 trillion investment in Treasury Bills, while investment in Sukuk bond, agency bond and green bonds followed with N78.1 billion, N10.82 billion and N15.64 billion respectively.
The N10.82 billion agency bond, according to the Commission, was invested in two government agencies – the Nigeria Mortgage Refinancing Company and the Federal Mortgage Bank of Nigeria.
The Commission, in the report, stated that the sum of N117.79 billion was invested by the PFAs in state governments’ securities. This is about 1.18 per cent of the total pension fund assets of N9.99 trillion.
For the private sector, an analysis of the report showed that the sum of N535.93 billion, representing about 5.36 per cent of the fund, was invested in domestic ordinary shares, while foreign ordinary shares had a total investment of N62.6 billion, amounting to 0.69 per cent.
The data also indicated that a total of N40.52 billion was invested in infrastructure.
According to the Commission, in May 2015, the operators invested N568 million in infrastructure and increased this to N1.35 billion in December 2015.
It added that the PFAs invested N2.06 billion in infrastructure bond in December 2016. The investment rose to N6.86 billion in December 2017.
The amount invested in infrastructure as of the end of September 2018 was put at N17.12 billion.
Other security instruments where the pension fund was invested are the corporate bonds, N597.45 billion and the supra-national bonds, N4.1 billion.
Also, the sum of N5.03 billion was invested by the PFAs in foreign money market securities; N23.62 billion in mutual funds; N224.63 billion in real estate; N32.31 billion in private
equity fund; while cash and other asset investments had N45.14 billion.
The industry regulator, National Pension Commission (PENCOM), from inception, has kept faith with the stipulated directive as regards portfolios the funds can be invested in.
Early in the week, it also directed PFAs to implement the second edition of the pension enhancement exercise for retirees on Programmed Withdrawal mode of retirement.
The pension enhancement CPS retirees, who have accumulated significant growth in their Retirement Savings Accounts (RSAs) and had retired between July 2007 and December 2017.
Accordingly, the retirees referred to above are by this notice advised to contact their respective Pension Fund Administrators (PFAs) to confirm their eligibility and complete requisite documentations