PenOp Urges Offshore Investment of Pension Funds Amid Naira Devaluation

Enhancing Pension Security: PenOp Advocates Offshore Investments

The Pension Fund Operators Association of Nigeria (PenOp) has made a compelling appeal to members of the National Assembly, urging them to consider amending the pension law. This proposed amendment aims to permit the investment of pension funds offshore, thereby offering a hedge against inflation and the devaluation of the Nigerian currency, the naira.

During the PenOp 4th National Assembly Retreat 2024, which convened members of the House Committee on Pensions and the Senate Committee on Establishment and Public Service, stakeholders deliberated on critical issues concerning pension management. Mr. Dave Uduanu, a PenOp member and Managing Director of Access Pensions, emphasized the need to domesticate the economy and reduce reliance on foreign currencies. He suggested that allowing pension funds to be invested offshore could provide a safeguard against currency devaluation.

Echoing this sentiment, Mr. Donald Onuoha, another PenOp member and Managing Director of Fidelity Pension Managers, underscored the importance of increasing pension contributions beyond the current 18 percent. This adjustment would help mitigate the risk of old-age poverty exacerbated by rising inflation rates.

In response to these recommendations, members of the National Assembly expressed their commitment to reviewing the Pension Reform Act (PRA) 2014. They pledged to collaborate with pension operators to identify areas for amendment, with the ultimate goal of ensuring a secure and comfortable retirement for all citizens.

As Nigeria navigates economic challenges, the call for offshore pension investments reflects a proactive approach to safeguarding retirees’ financial well-being. By exploring diverse investment opportunities and enacting legislative reforms, stakeholders aim to strengthen the pension system and uphold the dignity of aging Nigerians.

In conclusion, the collaboration between PenOp and the National Assembly underscores the collective effort to enhance pension security and promote financial resilience in Nigeria. Through strategic investments and policy reforms, stakeholders strive to build a more inclusive and sustainable pension ecosystem for future generations.