The Director General of the National Pension Commission (PenCom), Aisha Dahir-Umar, has denied allegations that the commission loaned N10tn to the Federal Government.
The House of Representatives in October adopted a motion mandating its Committee on Pensions to recover N10tn pension funds “borrowed” by the Federal Government.
Dismissing the claim during an interview over the weekend, Dahir-Umar said that PenCom was not a bank and did not warehouse or manage pension funds, adding that the Federal Government did not obtain a N10tn loan from the commission.
She said, “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 Securities and Exchange Commission. They are traded on authorised capital markets. That is, the Nigerian Exchange Limited and FMDQ OTC Securities Exchange.
“Moreover, pension fund assets are not managed by PenCom. I have said repeatedly that when we say pension assets have grown to N19.6tn, that does not mean PenCom has N19.6tn locked somewhere in its office or bank accounts. Pension fund assets are managed by the licensed PFAs and held in custody by the licensed Pension Fund Custodians.
“The PFAs are responsible for investing pension fund assets in allowable asset classes, including FGN debt instruments. The objectives are safety and fair returns. All these are in line with the provisions of the enabling law, the Pension Reform Act 2014, and the rules issued by the commission. It is obvious from the above that what is referred to as ‘loan to FGN’ is just investment in FGN securities by the PFAs, as is done by other institutional investors such as banks, insurance companies, asset managers, etc.”
Responding to claims that PenCom was owing Federal Government retirees arrears of pensions, Dahir-Umar argued that the Federal Government had consistently met its repayment obligations.
The PenCom DG further clarified claims about outstanding benefits to Federal Government retirees: “The delayed payment of retirement benefits to some Federal Government retirees and deceased employees is because of the inadequate and delayed funding for the payment of Accrued Pension Rights for those who were in service before the Contributory Pension Scheme was introduced when PenCom was established in 2004.
“Payment of the accrued rights is subject to release of funds by the Federal Government. So, it is beyond the powers of the Commission. However, we have been engaging the Federal Ministry of Finance for more funds to be released to settle these liabilities, but it is not a secret that the government itself has budgetary constraints.”
She said all those enrolled under the CPS had been receiving their benefits through their PFAs, adding that there was no unsolved complaint before the commission.
The total assets under the Contributory Pension Scheme reached N18.36tn by the end of 2023.
