Following the commitment from the Lagos State Government to ensure compliance with the minimum requirement for inclusion of State Bonds as investible instruments in the pension Industry, the National Pension Commission (PenCom) has granted a reprieve to the government by lifting the suspension order it earlier placed on the inclusion of the Lagos State N500 billion debt issuance programme as an investible instrument for pension funds.
PenCom, in a letter dated January 10, 2020 and seen by BusinessDay, said henceforth, Pension Fund Administrators (PFAs) may wish to invest in the current N100 billion issuance under the Lagos State N500 billion debt programme subject to their risk-reward appetite.
In a circular no PENCOM/CIR/PSP/12/02 of November 30, 2012, the pension regulatory body notified that any state government seeking to access pension funds through investment in its state bond must meet certain conditions among which are the enactment of a law to establish the contributory pension scheme, which must give pension contributions the same priority as salaries; establishment of a state pension bureau and a local government pension bureau to coordinate the implementation of the contributory pension scheme and other related pension matters in the state, and open retirement savings accounts with PFAs for all the employees that are covered under the contributory pension scheme in the state.
OLUFIKAYO OWOEYE
