Wednesday, June 23, 2021

    Expert urges calm over fund assets decline Pension

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    Naija247news Media, New York
    Naija247news is an investigative news platform that tracks news on Nigerian Economy, Business, Politics, Financial and Africa and Global Economy.

    By Nana Musa
    Abuja, May 10, 2021 A Financial and pension expert, Alhaji Aliyu Momoh, has advised Retirement Saving Account (RSA) holders not to panic over the reported decline in the pension fund assets in February.
    Momoh gave the advice in Abuja on Monday while reacting to the National Pension Commission (PenCom) report that disclosed a decline of N51.30 billion in the pension fund assets in February.
    Momoh attributed the decline in the pension fund assets to the rise in inflation which affected the value of the Naira.
    He expressed optimism that within the next one to two months, the value of the assets would stabilise and comfortably return to appreciate value.
    According to him, pension acts allow PenCom to invest in the country’s economy, security, mutual funds among other.
    “I know the value have actually dropped significantly in the last four months. It kept dropping.
    “If investments are actually done locally and there is a rise in inflation, it subsequently means a fall in assets of every investment.
    “The capital markets, the mutual fund, the bonds and everything will actually lose value by virtue of inflation.
    “This automatically affects the pension because the Act actually allowed it to invest all her funds in the Nigerian capital markets and economy. So, this is actually the cause.
    “The rise in inflation has dropped the value of Naira and all those things you are investing locally.
    “If you have a local investment today in January at the rate of N10,000 today it no longer worth N10,000, it is actually N8,000.
    “This means you have lost. So, it is actually practical,” Momoh said.
    He also called for more RSA contributors to curb the pension decline and to provide enough cash flow to augment the unrealized lost.
    He said that about 10 per cent of Nigerians in the public pension and some of the private sectors do not remitted their contributions at the right time.
    Momoh advised the Federal Government to set up a committee to review the activities of PenCom and its Pension Fund Administrator (PFA).
    Naija247news reports that PenCom had earlier reported that there was a decline of ₦51.30 billion in February which was mainly attributed to the depreciation in the prices.

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