Stanbic IBTC Pension Managers Invests N350b in Nigerian Stock Market

Chief Executive Officer (CEO) of Stanbic IBTC Pension Managers Ltd. (SIPML) Mr Eric Fajemisin, said the firm invested 12.5 percent of its Assets Under Management (AUM) worth N2.53 trillion, representing N350 billion, into the Nigerian Stock Exchange (NSE).

Speaking at a media parley in Lagos, Mr Fajemisin disclosed that the investment in equities comprised Mutual funds, Exchange Traded Funds and private equity funds, among others.

He also said that from 2004 to 2017, the firm paid a total of N66.5 billion to 37,700 retirees. The payment, according to him, was made monthly and quarterly as required by retirees without hitch in the last 14 years.

He also stated that the company’s AUM was in excess of N2.53 trillion with over 1.6 million retirement savings account across the country.

However, he emphasised that, “There is still more land to conquer in the industry and great improvement is also required.”

Mr Fajemisin said SIMPL was now Nigeria’s largest Pension Fund Administrator (PFA) in terms of clients.

On the micro pension scheme, he said if properly harnessed, it has a great potential, saying it has the capability of landing the industry into the next phase of growth and development.

According to Mr Fajemisin, the scheme had the capacity to deepen the country, considering the fact that 70 percent of Nigerian working population operate in the informal sector.

He highlighted other benefits of the scheme to include improved standard of living for the elderly, safety of funds, access to mortgage facilities and health insurance, among others.

On the part of SIPML Executive Director (Investments), Mr Oladele Sotubo, the multi fund structure to kick off on July 1, would compel PFAs to invest not below the required threshold.

According to him, the multi fund structure is divided into four different funds tagged Fund one, Fund two, Fund three and Fund four, saying age was determinant factor in PFAs investment exposure in the proposed multi fund structure.

Mr Sotubo said Fund one was the most aggressive fund for below 49 years, pointing out that PENCOM rule stipulated that PFA equities exposure in Fund one should be a minimum of 20 percent and maximum of 75 percent.

He explained that the Fund two is for 49 years and above with a minimum equity investment of 10 percent and a maximum of 55 percent, while under Fund three, 50 years and above were allowed to invest a minimum of 5 percent in equities and maximum of 20 percent.

He said that PFAs equity exposure under Fund four would be zero to 10 percent to minimise risk.

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Micro-pension Scheme will Deepen Asset Accumulation in Nigeria–Stanbic IBTC Pension Managers

Managing Director of Stanbic IBTC Pension Managers Limited, Mr Eric Fajemisin, has backed measures taken by the National Pension Commission (PENCOM) to sustain growth of the Nigerian pension industry.

According to him, micro pension scheme, multi-fund investment structure and Pension account transfer window, to mention but a few, are among initiatives capable of putting the sector in stronger footing going forward.

Stanbic IBTC Pension Managers Limited is the biggest pension fund administrator (PFA) in the country.

From Sunday, July 1, 2018, the new multi-fund structure announced by the industry regulator would become operational.

Speaking at a media interactive session in Lagos on Monday, May 28, 2018, Mr Fajemisin said such reforms and innovations are necessary to maintain the strength and depth of Nigeria’s Contributory Pension Scheme (CPS).

Mr Fajemisin noted that the Retirement Savings Account (RSA) Multi-Fund Investment structure, which replaces the “one-size-fits-all” arrangement that puts all active contributors into one RSA Fund, would resolve the challenge of asset-liability risk management faced by the operators.

According to him, the micro-pension scheme will help in deepening asset accumulation in the country, and provide the crucial capital required for investment in critical sectors of the economy.

As an initiative designed to cover an estimated 70 percent of Nigeria’s working population in the informal sector, the scheme offers enormous benefits to the society and ensure improved standard of living for the elderly, guarantee the safety of funds and may provide access to other incentives, such as mortgage facilities and health insurance., regardless of challenges associated with its seamless implementation.

By aligning the age and risk profile of RSA holders to match the four funds, contributors would have a better chance to earn improved returns on their investments in proportion to their risk appetites.

The different categories of the multi-funds structure are Fund 1, Fund 2, Fund 3 and Fund 4. Fund I is targeted at people of 49 years and below who in the quest for higher returns are willing to take more risks. Fund 2 is aimed at people who are aged 49 years and below and still working but are satisfied with moderate returns and levels of risks. Fund 3 targets people 50 years and above but still working and have very low risk appetite. In Fund 4 are retirees who have the lowest risk profile of all categories.

Among its other benefits include improved standard of living for the elderly, safety of funds and access to other incentives, such as mortgage facilities and health insurance. In addition are flexible contribution remittances, the opportunity to make withdrawal prior to retirement and the enhancement of financial inclusion in the country.

On the proposed pension transfer window, which allows a RSA holder to switch PFA once a year, the Stanbic IBTC Pension helmsman said it would deepen the democratic space in the pension industry as well as encourage healthy competition, resulting in further transparency and accountability, which would in turn enhance efficiency, innovation and service delivery.

Mr Fajemisin also reviewed the 2014 Pension Reform Act and the impact on the CPS. On the enabling law, he said the introduction of more stringent penalties for erring operators and directors, especially as it relates to mismanagement of funds, has engendered greater corporate governance, making it almost impossible to misapply pension funds by anyone.

By increasing the contributions of the employer and employee to 10 and 8 percent respectively, Mr Fajemisin said the Act has ensured the availability of more benefits to contributors at retirement. In addition, the Act makes the non-remittance of employees’ contribution by the employer an offence which the regulator can prosecute in court.

Source:BusinessPost