The federal government has not borrowed money from any pension fund administrator in the country since the Pension Reform Act changed the current pension system 18 years ago, the National Pensions Commission said on Tuesday. .
The commission said the reason for the clarifications was to respond to complaints and rumors in some quarters that much of the government’s recurrent spending is done by borrowing from pension funds.
The Head of Corporate Services of the National Pensions Commission, Alhaji Abdulqadir Dahiru said this during an interactive stakeholder forum/session organized by the Public Complaints Commission on the theme: “Efficient Administration of the Contributory Pension Scheme in Nigeria: the challenges and the way forward.’
He maintained that the government had not got hold of the pension funds.
According to him, instead of the government borrowing from pension funds, it was the PFA investment teams that sought and invested money in government bonds to balance their return and risk considerations.
Some stakeholders at the forum said: “Speculation that the government is borrowing from the Pension Fund is a threat to contributors.
“Security of the fund is paramount for contributors and other stakeholders.
“It is necessary to verify the authenticity of the borrowing allegation to possibly limit any threat to the program.”
But Dahiru, who eased fears, said the funds were safe
He said: “Pension funds are invested in public securities like banks, insurance companies and foreign investors who are interested in public debt.
“The federal government hasn’t borrowed pension funds, because people give the impression that these funds are kept somewhere and that the government has put their hands on them.
“Pension funds are invested. It is a deliberate policy of individual pension fund administrators and their investment teams to examine the investment instruments available, whether public or private, and decide in which they wish to invest, in order to balance their return and risk considerations.
“Therefore, the government does not borrow pension funds. Instead, they are invested in public debt instruments.
Earlier, the secretary, Philip Enyali, explained that the dissatisfaction of many pensioners and the need to address their numerous petitions to the Ombudsman regarding their rights necessitated the interactive meeting with the actors of the pension sector.
He identified the government’s inability to release funds when due, the delay in paying the group life insurance policy, unfunded retirement savings accounts, insufficient pension, etc. like some of the pensioners’ complaints to the ombudsman.
“One of the biggest challenges that typical employees face throughout their working lives is life after retirement. As part of the proactive efforts of the Commission, this interactive session is being organized to systematically examine the challenges of administering the current contributory pension scheme in the country,” he said.