PenCom Clears Air On Report That FG Took N10 Trillion Loan

PenCom Clears Air On Report That FG Took N10 Trillion Loan

The National Pension Commission (PenCom) has debunked reports making the rounds that it provided a N10 trillion loan to the Federal Government.

The Director General of PenCom, Aisha Dahir-Umar, made this clarification during a recent media interview where she stated categorically that PenCom is not a financial institution and does not hold or manage pension funds.

According to Dahir-Umar, the Federal Government did not borrow N10 trillion from the Commission as claimed in the media.

She also addressed allegations that PenCom owed pension arrears to Federal Government retirees and refuted insinuations that Pension Fund Administrators (PFAs) were failing to fulfil their responsibilities towards retirees in terms of granting access to their retirement savings.

“Investments by the PFAs in the securities of the Federal Government of Nigeria (FGN) are not loans as erroneously portrayed, but investments in securities, through bonds and treasury bills, as approved by the relevant government agencies, in this case the Debt Management Office (DMO) and Securities and Exchange Commission (SEC). They are traded on authorized capital markets. That is, the Nigerian Exchange Limited and FMDQ OTC Securities Exchange,” Channels Television quoted the PenCom DG saying.

She added: “Moreover, pension fund assets are not managed by PenCom. I have said it repeatedly that when we say pension assets have grown to N19.6 trillion, that does not mean PenCom has N19.6 trillion 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 (PFCs).

“The PFAs are responsible for investing pension fund assets in allowable asset classes, including FGN debt instruments. The objectives are safety and fair returns. All these are in line with the provisions of the enabling law, the Pension Reform Act 2014, and the rules issued by the Commission.

“It is obvious from the above that what is referred to as ‘loan to FGN’ is just investment in FGN securities by the PFAs, as is done by other institutional investors such as banks, insurance companies, asset managers, etc.”

Dahir-Umar emphasized the importance of investing in instruments issued or backed by the sovereign authority as an international best practice. He also highlighted that FGN securities align with the goals of providing safety and competitive returns.

“The FGN has consistently met its repayment obligations, both the principal amount and accrued interests, for all investments in bonds and T-bills to all investors, including pension funds. The information is always in the open and accessible on our website,,” she said.

The PenCom DG further clarified claims about outstanding benefits to Federal Government retirees. She said: “The delayed payment of retirement benefits to some Federal Government retirees and deceased employees is because of the inadequate and delayed funding for the payment of Accrued Pension Rights for those who were in service before the Contributory Pension Scheme (CPS) was introduced when PenCom was established in 2004.

“Payment of the accrued rights is subject to release of funds by the Federal Government. So, it is beyond the powers of the Commission. However, we have been engaging the Federal Ministry of Finance for more funds to be released to settle these liabilities, but it is not a secret that the government itself has budgetary constraints.”

The post PenCom Clears Air On Report That FG Took N10 Trillion Loan appeared first on Naija News.

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