The Director-General, National Pension Commission (PenCom) Mrs. Chinelo Anohu-Amazu, has recently charged operators of pension fund to derive ways of developing products that they invested in the country.
While speaking on the Role of Regulators in Deepening Capital Market at the 2016 Business Day Capital Market Conference in Abuja, themed “Deepening Nigeria’s Capital Market through Maximum Utilisation of Pension Funds”, the DG stated that the challenges faced with pension funds in the country were not due to the regulators but the operators of pension fund.
“The PFAs are constrained; they are unable to develop the products they invest which is why we have a preponderance of the pension funds in federal government securities, there are no alternatives. Part of the thing I want to throw out to operators in this room is to work towards developing alternatives and new products,” she said.
She also pointed that the regulators were doing their bit at ensuring that the PFAs were highly regulated while noting that several regulations had been done and what was left was to ensure the official issuance of those regulatory actions in the sector.
“Our eyes are on two things; protecting the funds and making sure that its primary mandate as required by law, which is paying retirement benefit as and when due, is not tampered with. That mandate also extends to making sure that the value is not eroded, and it will be our joy that various institutions are deepened by the pension fund and the capital market is just one of those institutions.”
She explained that the PenCom had about N5.4 trillion with approximately seven million contributors and it had the capacity to generate more which it was already doing through micro pension.
Also speaking, Alhaji Umaru Ibrahim, Managing Director, Nigeria Deposit Insurance Corporation said one of the major challenges in the sector was the unwillingness of people to invest.
Mr Jude Uzonwanne, the Principal, Bain and Company Nigeria, said that lack of competition at the PFAs was causing “an extreme conservatism in the sector.”
According to Uzonwanne, regulators should not only face trend but be more effective by focusing on changes that will trigger competition among PFAs.
He said mergers and acquisition should be encouraged as it would make CEOs to sit up and urged that family companies should be taken public to ensure sustainability.