Highlights of PenCom's Operational Framework for the Non-Interest Fund

Proshare

Friday, December 06, 2021 / 11:00 AM / By Rebecca Ebokpo  of AELEX / Header Image Credit: AELEX


 

The National Pension Commission (PENCOM) recently introduced a new category of fund which complies with sharia principles of investment. The Non-Interest Fund (Fund VI) permits pension contributors and retirees to choose the preferred investment portfolio they would want their pension contributions remitted to.

 

The Operational Framework

By the Operational Framework regulating the Fund VI, contributions made to the fund cannot be invested in the production or trading of alcohol, pornography, weaponry, gambling/betting, speculation, interest earning ventures and other similar undertakings that are contrary to Sharia principles. Furthermore, the scope of the prohibited schemes for the Fund VI is to be determined from time to time by the Financial Regulation Advisory Council of Experts (FRACE), an advisory body on Islamic Banking and Finance established by the Central Bank of Nigeria (CBN) to advice on matters relating to Islamic commercial jurisprudence.

 

The Operational Framework provides that the Fund VI is to be managed in two separate accounts by Pension Fund Administrators (PFAs): for active Retirement Savings Accounts contributors, and retirees. Both active contributors and retirees will be able to move their contributions to the Active Fund VI or Retiree Fund VI, respectively.

 

PFAs are also prohibited from investing contributions to the Fund in speculative instruments. The Operational Framework sets the maximum limits for the various allowable classes of assets that the Fund can be invested in, and further provides the modalities for Retirement Savings Account holders to migrate to the Fund VI, amongst other provisions. The Fund VI is in line with the multi fund investment structure introduced by PENCOM in 2018 which gives more freedom to retirees and contributors to invest their funds according to their risk enthusiasm. The Operational Frameworks can be downloaded here

 

 

Recent Articles by AELEX

1. Exploring Incentives for the Nigerian Creative and Entertainment Industry

2. When a Contractor Will Not Be Liable For Repudiatory Breach

3. The Requirements for Dealing in Foreign Securities in Nigeria and the Role of the Regulators

4. The Evolution of the Nigerian Monetary System through Central Bank Digital Currencies

5.  AELEX Petroleum Industry Act Articles Series: Funds Created Under The PIA (Part 1)

6.  NIPOST and FIRS Dispute Over Stamp Duty Collection: and End in Sight

7.  The Requirements for Dealing in Foreign Securities in Nigeria and the Role of the Regulators


Proshare Nigeria Pvt. Ltd.

 

Related News

1.  Pension Fund VI will Lead to the Creation of New Instruments in the Non-Interest Finance Market

2.  A Glimpse into the Pension Industry

3.  Little Change to PFA Asset Allocation; AUM Rose by 0.8% MoM in September 2021

4.  PENCOM August 2021 Report: Fixed Income and More Fixed Income

5.  Stanbic IBTC Pension Managers Spearheads Empowerment and Development for Nigerian Women

6.  PFA Portfolio Analysis in August 2021: Net Asset Value Grew by 0.9% MoM

7.  Four Reasons Why PAL Pensions Should Be Your Preferred Pension Fund Administrator

8.  Nigeria's Pension Industry Asset Under Management Increased by 13% YoY to N12.78trn in July 2021

9.  American Hartford Gold Group Resource: Finding A Gold IRA Company and Its Benefits

10. How Micro-Pension Can be Used to Deepen Financial Inclusion in Nigeria

11.  April 2021 PFI Portfolio Report: Net Asset Value Records First Rise in 2021

12.  PENCOM Revises Minimum Share Capital Requirement for Licensed PFA from N1bn to N5bn

13.  Nigeria's Pension Industry Asset Under Management Increased by 16.6% YoY to N12.25trn in Feb 2021

14.  Nigeria's Pension Industry Asset Under Management Increased by 17.9% YoY to N12.30trn in Jan 2021

15.  Pensions Industry Asset Under Management Increased by 20.3% YoY to N12.29trn in December 2020


Proshare Nigeria Pvt. Ltd.

READ MORE:
Related News
SCROLL TO TOP