PenCom mulls diversifying investments into infrastructure, housing assets

The National Pension Commission (PenCom) says it is reviewing its policies to boost pension fund investments in capital market products, infrastructure and housing assets after the pandemic.

Aisha Dahir-Umar, PenCom acting director-general, told Guardian that the commission is engaging stakeholders to develop infrastructure and housing assets that meet requirements for pension fund investment.

She said the commission is eager to encourage pension fund investments in infrastructure and housing without compromising the major objectives of pension fund investments, which are the safety of the assets and maintenance of fair returns on investments.

The capital market products being considered include hedging tools that would serve as a buffer to safeguard pension assets during volatile periods.

Dahir-Umar also disclosed that the COVID-19 disruptions in the Nigerian economy presents an opportunity for pension funds, which have long-term investment objectives, and to take advantage of the low prices in the equity market to achieve the long-term objective of fair returns to contributions.

“There are some opportunities for pension funds, given the long-term investment outlook,” she said.

“One of the likely fallouts of the COVID-19 pandemic is that prices of stocks may drop over the short to medium term. This would provide an opportunity for long-term investments by pension funds.

“Fortunately, the multi-fund investment structure which the commission introduced in 2019 provides further impetus towards long-term investments.

“This may be one of the likely fallouts of the COVID-19 pandemic. However, the expected rebound in the years ahead will provide adequate compensation.”

Dahir-Umar also assured that PenCom will continue to work towards ensuring that employers comply with the PRA 2014 by remitting pension contributions to their employee’s retirement savings account (RSA) as and when due.