PenCom Denies Allegations of N10 Trillion Loan to Federal Government

The National Pension Commission (PenCom) has refuted recent reports, (not from DNTWOK) claiming that the Commission extended a N10 trillion loan to the Federal Government.
Aisha Dahir-Umar, the Director General of PenCom, addressed these assertions during a media interview over the weekend, shedding light on the misconceptions surrounding the Commission’s operations.
Dahir-Umar emphasized that PenCom, as a regulatory body, does not function as a financial institution and does not hold or manage pension funds directly. Furthermore, she categorically stated that the Federal Government did not receive a loan amounting to N10 trillion from PenCom.
In addition to dispelling rumors about loans, Dahir-Umar addressed concerns regarding pension arrears owed to Federal Government retirees. She assured the public that PenCom remains committed to ensuring that retirees receive their pensions promptly and accurately, dismissing any insinuations of negligence or delay.
Furthermore, Dahir-Umar tackled allegations that Pension Fund Administrators (PFAs) are failing to meet their obligations to retirees, particularly regarding access to retirement savings.
She affirmed that PenCom maintains strict oversight over PFAs to ensure compliance with regulations and safeguard the interests of retirees.
“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,” she stated.
“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 debts 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 ‘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 added that it is an international best practice to invest in investible instruments issued or backed by the sovereign authority and that the FGN securities meet the objectives of safety and fair 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.
“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,” she said.
“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.”
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