Business

May 28, 2024

Naira devaluation: PenOp appeals for offshore investment of pension funds

Naira

By Rosemary Iwunze

Pension Fund Operators Association of Nigeria, PenOp, has appealed to members of the National Assembly to amend the pension law to allow for the investment of pension funds offshore to hedge against inflation and naira devaluation.

PenOp also charged members of the National Assembly to consider amending the pension law to increase pension contribution for workers to guard against old age poverty being triggered by rising inflation and naira devaluation.

PenOp made the appeal at the PenOp 4th National Assembly Retreat 2024, held for members of the House Committee on Pensions and members of the Senate Committee on Establishment and Public Service.

Speaking at the retreat themed: “The CPS: Navigating Challenges and Unlocking a Secured Future for Pensioners,” Mr. Dave Uduanu, a member of PenOp and Managing Director of Access Pensions, stated that the economy needs to be domesticated and rely less on dollars.

Uduanu said: “Regarding devaluation, what we need to do as a country is that we need to domesticate our economy. As we domesticate our economy and rely less on dollars, we can achieve more sustainable savings and inflation in real terms. But until we do that, the safeguard we have is to allow some of the pension funds to be invested offshore. 

“The recommendation is with PenCom now and the Central Bank of Nigeria, CBN, and it will be good to have the input of the senators and House of Representatives members to make sure that this sees the light of the day.”

Also speaking, another member of PenOp and Managing Director of Fidelity Pension Managers, Mr. Donald Onuoha, stated that there is a need to increase pension contributions from the present 18 percent to a higher value.

Onuoha said: “We need to re-echo the need to increase the pension contributions from the present 18 percent to something higher. This will guard against old age poverty which is being triggered by rising inflation.”

Meanwhile, the National Assembly members have asked the pension operators to identify sections of the Pension Reform Act (PRA) 2014, to be amended, pledging to ensure thorough review of the pension law to engender a comfortable lifestyle for retirees.