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PenCom balance sheet falls by 19% to N1.7bn

By Babajide Komolafe
NATIONAL Pension Commission (PenCom) has  posted a 19 per cent fall in its balance sheet to N1.7 billion for its operational year ending December 31st 2008.

The Commission’s report for 2008 released last week show that total assets and liabilities fell to N1.739 billion from N2.159 billion.

The fall in balance sheet was however occasioned by an operational deficit recorded by the Commission during the year.

The report showed that while total income rose by 16 per cent to N2.292 billion from N1, 972 billion, expenditure rose by 59.4 per cent to N2.711 billion from N1.701 billion.

The rise sharp rise in expenditure was occasioned by 54 per cent increase in administrative expenses and 128 per cent jump in depreciation of fixed assets.

Administrative expenses rose from N1,582 billion to N2,440 billion while depreciation charge on fixed assets rose to N272 billion from N119 billion.

Analysis of the Commission’s income profile show that  income from fees and commission, which constitute 89 per cent of its total income rose by 33 per cent to N2.045 billion from N1.536 billion. Budgetary receipts from the federal government however dropped by 47 per cent to N210 billion from N397 billion.

Investment income etched up to N29.6 billion from N28.4 billion while other income fell by 30 per cent to N6.8 billion from N10.3 billion.

Notwithstanding the decline in the Commission’s performance for the year, the Director-General, Mr. Muhammad Ahmad reported that the pension industry witnessed improved developments in various sectors.

 “As at the end of the year 2008, a licence each was granted for Pension Fund Administrators, Pension Fund Custodians and Closed Pension Fund Administrators that brought the total number of operators to 38, which includes 26 PFAs, 5 PFCs and 7 CPFAs.

Additional approval was granted to one existing scheme bringing the total number of Approved Existing Scheme (AES) to 19 in 2008.”As at 31 December 2008, workers in the public and private sectors had opened 3,467,856 retirement savings accounts with licensed PFAs.

The membership of the CPFAs and the AES were 26,026 and 41,134 respectively. Also many state governments were at various stages of implementing the contributory pension scheme. In the public sector, the annual contributions had grown from N70.25 billion in 2007 to N99.28 billion in 2008, which represented a growth of 41.32 percent.

Similarly, private sector contributions grew from N68.34 billion in 2007 to N80.81 billion in 2008, representing an increase of 18.25 percent.

Indeed, monthly contributions averaged N15 billion during the year where the public sector contributions averaged N8.27 billion compared with N5.85bilion in 2007 while in the private sector, total monthly average contributions stood at N6.73 billion compared with N5.70 billion in 2007.”

The Commission  said that the total pension fund assets under the contributory pension scheme stood at N1.098 trillion as at December 31, 2008, out of which it exposed N430.98 billion or 39.22 per cent to the banking sector, in both equities and money market instruments.

The pension assets grew from N815.18 billion as at December 31, 2007, representing an increase by 34.81 percent. 

The pension assets which were under the management of pension fund administrators (PFAs) and closed pension fund administrators (CPFAs), were made up of N471.76 billion (42.93 percent) retirement savings account (RSA) assets; N294.62 billion (26.81 percent) CPFA assets and N332.61 billion (30.27 percent) approved existing scheme (AES) assets.


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