Stanbic IBTC Pension Managers has said that assets currently under its control have hit N2.53 trillion.
This figure represents significant percentage of the total N7.779 trillion pension assets in Nigeria invested in various portfolios.
Managing Director and Chief Executive Officer of Stanbic IBTC Pension Managers, Mr. Eric Fajemisin, who disclosed this at a recent press briefing in Lagos recently, said the company maintains a total of 1.6 million Retirement Savings Account holders (RSA) and has so far paid N66.5 billion to 37,700 retirees on a monthly or quarterly basis as required by the retirees.
He said about 12.5percent of the assets are invested in the equity market, adding that the company is ready for the multi fund structure initiative of the regulator which is expected to kick off in July.
He described the multi fund structure as categorisation of pension funds into four different structures using age as critical determinant factor for risk taking.
According to him, the structure will kick off July 1 and Stanbic IBTC is ready to play along with the new initiative of the regulator.
PenCom Investment Supervision Personnel, Mr. Ibrahim Kangiwa, had at a recent seminar organised by the commission in Uyo, Akwa Ibom State, announced that the multi fund Structure initiative would kick off among PFAs on July, 1, 2017.
Kangiwa, said the main objective of the RSA multi-fund investment structure is to resolve the challenge of asset-liability risk management experienced by pension funds.
According to him, this would be achieved by: better aligning the risk and returning expectations of contributors; better matching of pension assets and liabilities; as well as diversification of pension fund portfolios, as minimum limits are set for aggregate investments in variable income securities for each fund.
Fajemisin, noted that RSA Multi-Fund Investment structure, which replaces the “one-size-fits-all” arrangement that puts all active contributors into one RSA Fund, would resolve the challenge of asset-liability risk management faced by the operators.
He said it will do this by aligning the age and risk profile of RSA holders to match the four funds, adding that contributors would have a better chance to earn improved returns on their investments in proportion to their risk appetites.
According to him, the different categories of the multi-funds structure are Fund 1, Fund 2, Fund 3 and Fund 4. Fund 1 is targeted at people of 49 years and below who in the quest for higher returns are willing to take more risks. Fund 2 is aimed at people who, are aged 49 years and below but are still working but are satisfied with moderate returns and levels of risks. Fund 3 targets people 50 years and above but still working and have very low risk appetite. In Fund 4 are retirees who have the lowest risk profile of all categories.
Speaking on the micro-pension scheme, Fajemisin said it would help in deepening asset accumulation in the country, and provide the crucial capital required for investment in critical sectors of the economy. As an initiative designed to cover an estimated 70 percent of Nigeria’s working population is in the informal sector, the scheme offers enormous benefits to the society and ensure improved standard of living for the elderly, guarantees the safety of funds and may provide access to other incentives, such as mortgage facilities and health insurance, regardless of challenges associated with its seamless implementation.
On the proposed pension transfer window, which allows a RSA holder to switch PFA once a year, the Stanbic IBTC Pension helmsman said it would deepen the democratic space in the pension industry as well as encourage healthy competition, resulting in further transparency and accountability, which would in turn enhance efficiency, innovation and service delivery.
Fajemisin also reviewed the 2014 Pension Reform Act and the impact on the CPS. On the enabling law, he said the introduction of more stringent penalties for erring operators and directors, especially as it relates to mismanagement of funds, has engendered greater corporate governance, making it almost impossible to misapply pension funds by anyone. By increasing the contributions of the employer and employee to10 and 8 percent respectively, Fajemisin said the Act has ensured the availability of more benefits to contributors at retirement. In addition, the Act makes the non-remittance of employees’ contribution by the employer an offence which the regulator can prosecute in court.
Also speaking at the event, Stanbic IBTC Pension Head of Business Development, Mrs. Nike Bajomo, said the company is already reaching out to its over 1.6 million RSA holders nationwide to create awareness about commencement of the multi-fund structure with effect from July 1, 2018. She said the PFA will continue to engage various stakeholders on developments in the industry to ensure the provisions of the CPS are fully harnessed to the benefit of all. Such platforms as the employers’ forum, preretirement seminars, among other initiatives Stanbic IBTC Pensions organises yearly, are fashioned to ensure regular engagement and to drive awareness.