PenCom reveals investment strategies to hedge against inflation

• Nigerian workers marque monthly contributions to their pension funds nether the absorption of an administrator, successful the hopes of information successful their status years
• However, the nonaccomplishment of purchasing powerfulness implicit the past decennary has raised superior concerns astir the world of their expectations
• The pension manufacture regulator, PenCom, is present taking steps to code the concern and springiness retirees amended payouts successful their inactive years

Ruth Okwumbu-Imafidon, a writer with Legit.ng, has implicit a decennary of acquisition successful business reporting crossed integer and mainstream media.

With the perpetually rising ostentation and naira depreciation, Nigerian workers are having to woody with the world that their status savings whitethorn not beryllium capable to supply them information successful their status years.

To woody with this issue, the National Pension Commission (PenCom) has urged the Pension Fund Administrators (PFAs) to actively research assets and concern strategies that optimally equilibrium risks, portion guaranteeing bully returns and semipermanent sustainability.

The PenCom Director-General, Ms. Omolola Oloworaran, stated this portion speaking astatine a sensitisation store connected “Investment successful Alternative Assets” organised for Chairpersons of Board Investment Strategy and Risk Management Committees of Pension Fund Administrators (PFAs).

As the regulator, Pencom has urged PFAs to determination towards alternate assets that supply amended returns without compromising security. Photo credit: Pencom, Nurphoto
Source: Getty Images

Oloworaran observed that Nigeria’s existent economical scenery is causing a dependable diminution successful the purchasing powerfulness of the Retirement Savings Account (RSA) contributors.

She called for a dynamic and resilient concern strategy among the administrators to support the pension assets and guarantee pension adequacy.

PenCom urges PFA to hedge against inflation

The PenCom DG noted that retired of the full pension plus of N24.11 trillion arsenic of May 30, 2025, astir 62% were invested successful Federal Government Securities.

Another 18% was invested successful different fixed-income securities, portion alternate assets similar infrastructure funds and backstage equity 80% lone got 3% of the full pool.

She called for much concern successful alternate assets, noting that they supply a complementary pillar to the halfway concern strategies of pension funds and supply for a harmless diversification of pension assets with improved risk-adjusted returns.

According to The Nation news, the store was enactment unneurotic to connection PFAs applicable insights into the benefits of alternate assets and however they can leverage them to diversify pension portfolios and execute sustainable growth.

This, according to the PenCom boss, is successful enactment with the concern taxable of the pension industry to sphere superior and make just returns.

Oloworaran urged the PFAs to optimally deploy the pension funds and optimise the afloat concern potential, and straight addressed the Chairpersons of the Investment Strategy and Risk Committees:

“You person a fiduciary duty, which is simply a ineligible and ethical work to enactment successful the champion interests of Retirement Savings Account holders astatine each times. This work includes ensuring that concern decisions are based connected dependable strategy, robust hazard assessments, and are compliant with the guidelines issued by the Commission.“Fiduciary work besides means independency of thought. It means resisting undue influence, asking hard questions, and insisting connected transparency. It requires that each concern determination is not lone justifiable connected insubstantial but besides defensible successful principle.”

PenCom urges employers to comply with remittance

Meanwhile, PenCom has issued a last informing to employers and organisations to comply with the provisions of the 2014 Pension Reform Act.

The committee noted that non-compliant firms would beryllium blacklisted aft the expiration of the deadline.

PFAs negociate and turn the funds to supply fiscal information for retired workers. Photo credit: Contributor
Source: Getty Images

PenCom has besides granted Pension Funds Administrators afloat authorization to process and approve status benefits.

The caller rules destruct the request for anterior support from PenCom erstwhile workers request to entree status benefits.

PenCom increases monthly payouts for pensioners

In related news, PenCom has taken a large measurement to guarantee that pensioners get fiscal information successful their retirement.

Legit.ng reported that the committee importantly increased monthly payouts by up to 43%.

The summation takes the full monthly payouts from N8.3 cardinal to N11.9 billion, with implicit 200,000 retirees to benefit.

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Source: Legit.ng