For contributors who choose non-interest money and capital market items, the National Pension Commission (PenCom) has developed a Non-Interest Fund also known as RSA Fund VI.
The Commission maintained in a statement posted on its website on Thursday that the non-interest fund offers a viable alternative to traditional interest-based financial instruments for pension fund investing.
According to PenCom, the non-interest fund, Fund VI, follows the Financial Regulation Advisory Council of Experts’ standards and complies with Islamic law and any other established non-interest principles.
The statement reads, “The Non-Interest Fund is a fund that complies with the provisions of Islamic Commercial Jurisprudence and any other established non-interest principles, as approved by the Financial Regulation Advisory Council of Experts or any other body constituted by the Central Bank of Nigeria and the Securities and Exchange Commission, from time to time. The FRACE has certified that the Operational Framework issued by the Commission complies with non-interest (Shari’ah) finance principles.”
For interested Retirement Savings Account holders, the Commission directed Pension Fund Administrators (PFAs) to construct and administer the Non-Interest Fund (Fund VI). The Non-Interest Fund would also be split into two funds for active RSA holders and retirees, according to PenCom.
The statement reads further “All Pension Fund Administrators, PFAs, are required to create and maintain the Non-Interest Fund (Fund VI) for interested Retirement Savings Account, RSA, holders. The Fund shall be separated into two funds for Active RSA holders and Retirees respectively.
“RSA holders in Fund I, II, III, and retirees in Fund IV are eligible to move their RSA contributions to the Non-Interest Fund (Fund VI) by making a formal request to the PFA, in line with the provisions of the RSA Multi-fund Implementation Guidelines and Section 7.6 of the Investment Regulation dealing with Transfers between Fund Types within a PFA.”
To learn more about the Non-interest Fund, you can read our publication here