The National Pension Commission (Pencom), has denied reports that the Federal Government has borrowed money from pension fund.
This, the Commission said, was to address complaints and rumours in some quarters that a large chunk of the government’s recurrent spendings were done by borrowing from pension funds.
Pencom’s Head of Corporate Services, Alhaji Abdulqadir Dahiru, stated this when he spoke at a Stakeholders Forum/Interactive Session organised by the Public Complaint Commission with the theme: ‘Effective Administration of the Contributory Pension Scheme in Nigeria: Challenges and the Way Forward’.
He clarified that instead of the government to borrow pension funds, it was the investment teams of pension fund administrators that seek and put money into government bonds to balance their return and risk considerations.
Some stakeholders at the forum had said, “The speculation that the Government is borrowing from the Pension fund is a threat to the contributors.
“The safety of the Fund is paramount to contributors and other stakeholders alike.
“There is need to ascertain the authenticity of the allegation of borrowing to possibly curb any threat to the Scheme.”
Responding, Dahiru stated: “Pension funds are invested in government securities like banks, insurance companies, and foreign investors who are interested in government debt.
“The Federal Government has not borrowed pension funds, because people are giving the impression as if these monies are kept somewhere and government has dipped its hands into it.
“Pension funds are invested. It is a deliberate policy of individual pension fund administrators and their investment teams to look at the investment instruments available, whether government or private, and decide which one they want to invest in, to balance their return and risk considerations.
“Therefore, government does not borrow pension funds. Instead, they are invested in government debt instruments.”
Earlier, the Secretary, Public Complaint Commission, Mr Philip Enyali, explained that the dissatisfaction of many retirees and the need to address their many petitions to the Ombudsman, regarding their entitlements necessitated the interactive meeting with Stakeholders in the pension industry.
He identified the inability of the government to release funds as and when due, delay in payment of group life insurance policy, non-funding Retirement Savings Accounts, inadequacy of pension payment remittances etc. as some of the complaints by retirees to the ombudsman.
“One of the greatest challenges that stares the typical employees in the face throughout their working life is life after retirement. As part of proactive efforts by the Commission, this interactive session is being held to systematically examine the challenges of the administration of the Contributory Pension Scheme currently in operation in the country,” he said.