Pension

Need to increase penetration of pension funds in private equity – Experts

Financial Experts have deliberated on how pension funds could be utilised to add more values to contributors and boost private sector

The discourse was at a roundtable conference organised by Sigma Pensions in Lagos.

The News Agency of Nigeria (NAN) reports that Sigma Pensions Business RoundTable is the first series of leadership initiative to bring to fore key issues in investment places for pension funds .

Mr Olabode Augusto, Chief Executive Officer (CEO) of Augusto and Company, said there was need to increase the penetration of pension funds in private equity.

He posited that there were micro risks the economy is facing as the country prepare for the 2019 general elections despite the increase in oil prices.

“One of the micro risks included non availability of private fund the private sector could utilise to contribute its own quota to economic development,” he said.

He noted that the private sector was starved of funds, because the banks are not lending any more.

“The option available to private sector is pension and insurance funds,” he said.

He posited that the penetration of pension funds into private sector through private equity would boost performances of private sector and automatically boost the country’s Gross Domestic Product (GDP).

He, however, said there were challenges that limited the penetration of pension funds into private sector.

“First, it is due to the regulations of National Pension Commission (PenCom), the only way pension funds could be penetrated is through ‘private equity funds.

” This means the players in the private sector needed to get listed on the Stock Exchange.

“Secondly, there is need for the private sector players to open their financial report for assessment, which they avoid always.

“This is needed to engage financial analysts, pension practitioners, pensioners and private sector players to stem up deliberations on challenges of private equity funding to enable pension penetration,” Augusto said.

Doyin Salami, an associate Professor at the Lagos Business School (LBS), urged the Federal Government to mordenise basic infrastructures for prosperity to take place.

He said: “There is a demand for PenCom to come out with policies that will create jobs, mordernise infrastructures, lower interest rate to enable prosperity to take place.

“No prosperity and values can be added to pensioners’ life and the economy as a whole outside the modernisation of basic infrastructures.”

The Managing Director of Pension Sigma Pensions, Mr Dave Adamu, said that over 700 Nigerians have their Retire Savings Accounts (RSA) with Sigma Pensions.

He said that as at June, the pension outfit RSA fund has hit N283 billion the Retirees Fund has hit N44 billion while other Defined Benefit Schemes (o-DBS) has hit N358 billion

He commended PenCom on the new Multi-Fund structures devised to guide the administration of Pension Funds.

Mr Mark Collier, the Chairman of Sigma Pensions, said the country offers a new market for pension investments.

He, however, said that there was need for pension and investment savings to be understood by hard working Nigerians.

“What I observed was that pension practitioners needed to embark on pension awareness campaign and engage pension savers in dialogue.

“In the future, these workers would hang up their boots, there is need for them to know the value pension would add to them.

“We can only be good at this if they believe in us,” he said

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