Pension Funds investment: PenOp calls for review of extant laws
The Pension Finds Operators Association of Nigeria (PenOp) has called for considerate review of extant laws that will allow prudent investment in some critical areas such as infrastructure.
Presenting a paper titled ‘Investment of Pensions Funds, Processes- Challenges, Risks and Rewards’ at a Media Retreat organized by PenOp in Lagos, the Head of Investment, Pension Alliance Plc. Abimbola Sulaiman noted that current regulations made provision for maximum possible spend on infrastructure to be N682 billion or $3.4 billion.
She noted that when considered that an estimated $3 trillion is required over a period of 30 years to cover infrastructure deficit according to the National Integrated Infrastructure the limit of spending is grossly insufficient.
She suggested infrastructure bonds as the easiest and safest way to introduce majority of pension funds into infrastructure investments, as it is similar to traditional bond investments adding that the bonds should be tied to specific projects.
Sulaiman who warned that pension funds if invested in infrastructure will never be subsidize equally suggested that pension funds should be channeled to economic investment which include transport, utilities, communication and renewable energies to ensure steady returns on investment adding that if investment is made in road construction for instance, road users should be meant to be paying toll fees.
She warned against investment of the funds in social services like hospital, schools to ensure availability of the funds when needed.
She highlighted risks around government support for infrastructure investment to include Regulatory instability, inadequate viable PPP legal frameworks among others.