May 27, 2024

PenCom denies Claims of Lending N10tn to FG



Aisha Dahir-Umar, the Director General of the National Pension Commission (PenCom), has categorically denied allegations that the commission loaned N10tn to the Federal Government. The House of Representatives had earlier adopted a motion, directing its Committee on Pensions to recover the purported N10tn pension funds allegedly “borrowed” by the Federal Government.


In a recent interview, Dahir-Umar emphasized that PenCom is not a bank and does not manage or warehouse pension funds. She clarified that the Federal Government did not obtain a N10tn loan from the commission. Dahir-Umar dismissed the portrayal of investments by Pension Fund Administrators (PFAs) in government securities as loans, emphasizing that they are approved investments traded on authorized capital markets.


Dahir-Umar stated, “Pension fund assets are not managed by PenCom. 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.”


Addressing claims about outstanding pension benefits to Federal Government retirees, Dahir-Umar explained that delayed payments were due to inadequate and delayed funding for Accrued Pension Rights. She clarified that these payments are contingent on funds released by the Federal Government and emphasized the Commission’s ongoing engagement with the Federal Ministry of Finance to secure additional funds.


Dahir-Umar highlighted that the delay in funding is a result of budgetary constraints faced by the government. Despite challenges, she assured that the Federal Government has consistently met its repayment obligations, and there are no unresolved complaints before the commission.


The total assets under the Contributory Pension Scheme reached N18.36tn by the end of 2023, showcasing the significant growth of pension funds in the country. The clarifications provided by the PenCom DG aim to dispel misconceptions and provide a transparent understanding of the pension fund management system in Nigeria.

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