PENCOM: Obasanjo cautions against unsecured investment of N6trn pension assets
Former President Olusegun Obasanjo has warned against the investment of the almost N6 trillion Nigerian workers pension assets being managed by the National Pension Commission ( PenCom) in unsecured investment portfolios to guard against the repeat of the ugly pension crises recorded in the country between year 2000 and 2004.
He gave the advice in Abuja today while delivering his keynote address at the opening of this year’s World Pension Summit ‘Africa Special’ co- hosted by the Netherland – based World Pension Summit Organisation and the PenCom.
The former President under whose tenure the current contributory pension scheme was introduced through the Pension Reform Act of 2014 said the advice had become necessary so that the appetite for quick gains or temptation for high return on investment through the investment would not lure the Administrators of the funds into risky and unsecured investment platforms.
Obasanjo said : “I am happy to know that what we put in place over 10 years ago has become so successful with 7 million workers already covered with almost N6 trillion assets. What we should now be discussing is how we can capture more workers and not necessarily what to do with the assets already in stock
“Pension management innovations should be guided by sustainability . We cannot be too adventurous with the contribution of workers’ funds because when people work all their lives and save for their future , they should not be told stories when they retire at old age and they want their money.
“That is why I insisted that in your discussion on managing pension with innovation , it must be guided by sustainability and security. People must be assured that when they need money at their old age it would be there for them.
“I remember, when I was the President, I imitated the idea of saving for the raining days, but the Governors told me there was no need saving because it was already raining. If it was raining then, what do he have now?” the former President rhetorically asked amid thunderous laughter from the large audience of participants .
He then maintained that pension funds must only be invested in sustainable investment platforms like housing or road infrastructure as is the case in Singapore
Since 2004 Nigeria has taken up a leading role with her pension reform. A true showcase for the African continent. The enactment of thePension Reform Act 2004 has proven to be key starting point of a new era in pensions for Nigeria.
On the occasion of the tenth anniversary of the pension reform in Nigeria, the WorldPensionSummit ‘Africa Special’ kick-started in 2014 a unique knowledge platform for all African nations on pension market development and all complexities involved.
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