Fund VI also known as non-interest fund is established to cater for the RSA holders who want their RSA fund to be invested in non-interest bearing and ethical investment instruments.
The creation of the fund is in line with the multi-fund structure introduced by PenCom and currently operational in the pension industry. There are currently 5 different types of pension funds under the CPS in Nigeria. The introduction of the non-interest fund takes the total to six.
Here are some basic things you need to know about the non-interest fund
- The establishment of fund 6 is in line with the multi-fund structure.
- Contributors in Fund I, II and III are ONLY allowed to move to Active Fund VI.
- Contributors in Fund IV are ONLY allowed to move to Retiree Fund VI.
- Contributors in Fund III who have reached the retirement age can move directly to Fund VI instead of Fund IV if they desire to.
- PFAs are not allowed to invest the assets in Fund VI in the production or trading of alcohol, pornography, weaponry, gambling/betting, speculation, interest-earning ventures and other ventures of similar nature.
- Fund VI assets are ONLY to be invested in instruments that are free from speculation and uncertainty that might lead to destruction or loss.
- Fund VI assets are also allowed to be invested in conventional assets where a PFA is unable to find approved Non-Interest instruments. The conventional assets are to be phased out as more approved Non-Interest instruments become available.