By Milcah Tanimu

Aisha Dahir-Umar, the Director General of the National Pension Commission (PenCom), has refuted claims that the Commission provided a N10 trillion loan to the Federal Government, labeling such reports as “totally misleading.” Addressing the issue in a media interview, she clarified that investments made by Pension Fund Administrators (PFAs) in Federal Government securities are not loans but investments in securities through bonds and treasury bills. These investments are approved by relevant government agencies, including the Debt Management Office (DMO) and Securities and Exchange Commission (SEC), and are traded on authorized capital markets such as the Nigerian Exchange Limited and FMDQ OTC Securities Exchange.

Mrs. Dahir-Umar emphasized that PenCom does not manage or warehouse pension funds and, therefore, does not possess the pension assets, which are managed by licensed PFAs and held in custody by licensed Pension Fund Custodians (PFCs). She reiterated that the PFAs invest pension fund assets in allowable asset classes, including Federal Government debt instruments, following the provisions of the Pension Reform Act 2014 and the rules issued by the Commission.

The PenCom DG highlighted that referring to “loan to FGN” actually means investments in Federal Government securities by PFAs, a common practice among various institutional investors like banks, insurance companies, and asset managers. She pointed out that the Federal Government consistently meets its repayment obligations, including the principal amount and accrued interests, for all investments in bonds and treasury bills.

Mrs. Dahir-Umar also addressed claims about outstanding benefits to Federal Government retirees, explaining that delayed payments are due to insufficient and delayed funding for the payment of Accrued Pension Rights for those who served before the introduction of the Contributory Pension Scheme (CPS) in 2004. The payment of accrued rights is contingent on funds released by the Federal Government, and PenCom has been engaging with the Federal Ministry of Finance to secure additional funds to settle these liabilities. Despite budgetary constraints, all those enrolled under the CPS have been receiving their benefits through their PFAs, and there are no outstanding complaints before the Commission.