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Introduction of Fund VI will deepen financial market investible assets – Expert

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The introduction of Pension VI by the National Pension Commission (PenCom) will offer new non-interest finance instruments for Shariah-compliant workers and investors. This statement was delivered by Mrs. Abimbola Sulaiman, Head, Investment Management, ARM Pension Managers (PFA) Limited while speaking on “Assessing Shariah Pension Fund VI & Issues Facing RSA Holders in Nigeria.”

She added that this will boost the Nigerian financial market’s investable assets and shariah-compliant prospects. Exploring products that span Sukuk, other Halal income structures, real estate, and infrastructure might be a good fit, she said.

The finance expert expressed optimism that the Pension asset would contribute to the growth of the country’s real sector, but emphasized that the primary investment goal for pension savers should be to increase their purchasing power, which means that pension investment returns should outperform inflation.

Infrastructure financing, infrastructure debt, equities, and real estate are among the areas where pension investments are still lacking, according to her.

She offered an overview of Shariah Pensions and what they mean for people who want to invest in a life pension. She explained that a non-interest fund was recently added to the retail pension scheme and that a multi-fund structure was created in 2018 to allow contributors to choose which retail funds they want to subscribe to.

The micro pension was created in 2019, and the RSA fund VI was introduced in 2021 to benefit individuals who invest according to Sharia rules.

It is a wonderful development, according to her, as well as a mandatory pension program. The National Pension Commission (PENCOM) has taken great care to ensure that products are appropriate for different risk profiles.

She explained that Fund VI allows persons who are already enrolled in the pension plan but do not have the option to opt-out to stay in the plan and ensure that their investments are in line with their fundamental/religious convictions. Since 2004, the Nigerian pension industry has aimed to become a prominent global market.

She cited the 2004 reforms as a result of her investigation into investments and why many retirees are denied access to their funds. The 2014 amendment was primarily defined benefit, and it was significantly underfunded. Nonetheless, the Pension Reform Act has addressed the issues. Pensioners in the PFA-managed contributory pension system, she claims, have been sorted out and supported by competent regulations.

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