Aisha Dahir-Umar, Director General of the National Pension Commission, has disputed reports that the commission lent N10 trillion to the Federal Government.
In October, the House of Representatives passed a vote directing its Committee on Pensions to collect N10 trillion in pension funds “borrowed” by the Federal Government.
During an interview over the weekend, Dahir-Umar denied the assertion, stating that PenCom was not a bank and did not warehouse or handle pension funds, and that the Federal Government did not get a N10tn loan from the commission.
She stated that “investments by the PFAs in the securities of the Federal Government of Nigeria are not loans as erroneously portrayed, but investments in securities, through bonds and treasury bills, as approved by the relevant government agencies, in this case, the Debt Management Office and the Securities and Exchange Commission.” They trade on authorized capital markets. That is, the Nigerian Exchange Limited and the FMDQ OTC Securities Exchange.
Moreover, PenCom does not manage pension fund assets. I have constantly stated that when we say pension assets have grown to N19.6 trillion, it does not imply that PenCom has N19.6 trillion locked away in its office or bank accounts. Licensed PFAs handle pension fund assets, whereas licensed Pension Fund Custodians hold them in custody.
“The PFAs are in charge of investing pension fund assets in permitted asset classes, which include FGN debt instruments. The objectives are safety and fair returns. All of this is consistent with the provisions of the enabling law, the Pension Reform Act of 2014, as well as the rules established by the commission. The following clearly shows that what is referred to as a ‘loan to FGN’ is simply the PFAs’ investment in FGN securities, as is done by other institutional investors like as banks, insurance companies, asset managers, and so on.
Responding to charges that PenCom owed arrears of pensions to Federal Government retirees, Dahir-Umar stated that the Federal Government had regularly satisfied its repayment obligations.
