Equity Contributions For Residential Mortgage Hit N7bn In Six Months

The Chief Executive Officer (CEO) of the Pension Fund Operators Association of Nigeria (PenOp), Mr. Oguche Agudah has disclosed that a total of N7,887,611,972, 93 equity contributions for a residential mortgage were approved between March -September 2023.

Mr. Agudah who disclosed this in his presentation at a virtual Media Parley organised for the Pension Correspondents Association of Nigeria (PENCAN), Abuja Chapter on Thursday said, the amount may double in the coming year as many people are jostling to have their own homes.

TheFact Daily recalled that the National Pension Commission (PENCOM) last year issued guidelines on how to access a retirement savings account (RSA) balance towards payment of equity contribution for a residential mortgage.

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That was following the window created by the Pension Reform Act 2014 (PRA 2014) which made provision for RSA holders to use part of their retirement savings as equity contributions for residential mortgages.

Based on the guidelines, a maximum of 25 percent of the total RSA could be used as equity contribution for residential mortgage purposes.

The PenOp boss also revealed that a lump sum of N1.63 trillion was paid to 443,000 Retirees as a life annuity in the last 15 years.

He noted that the amount increased from N1.51 billion paid to 331 applicants in the Third Quarter of 2011 to N665.13 billion paid to 111,708 applicants in the Second Quarter of 2023.

Speaking further on the gains, pains, and way forward for the industry as it prepares to mark 20 years in 2024, Agudah said, the industry has grown from 2,543,178 clients in 2007 to 10, 023,314 in July 2023.

Agudah who said, the 2004 Pension Act has sanitized the pension industry in Nigeria, said, a recovery of outstanding pensions of N24.8 billion was made by PenCom in the Third Quarter of 2023.

On Death Benefit, he said, a total of N356.32 billion was paid to 91,214 beneficiaries in the Second Quarter of 2023.

He also disclosed that a total of N208.86 billion was paid to 475, 000 Nigerians who lost their jobs from the 25 percent RSA balance.

The PenOp boss said, the investments made by the Pension Fund Administrators (PFAs) in the equity market have grown from N344.69 billion (15.36%) in the Third Quarter of 2011 to N1.54 trillion (8.88%) in the Third Quarter of 2023.

He also disclosed that the PFAs’ investments in Corporate Debt have grown from N69.32 billion (3.09%) in the Third Quarter of 2011 to N1.86 trillion (10.70%) in the Third Quarter of 2023.

On plans for 2024, he said, apart from the celebration of 20 years of the PRA, there would be a greater focus on Micro Pension.

He added that the 1 million target of the Micro Pension Plan (MPP) was not achieved because of Covid-19, therefore, government and private firms would be engaged to grow it.

He listed other targets for next year to include revision of investment guidelines, more applicants and approvals for RSA mortgage, possible kickoff on Offshore investment and infrastructure consortium.

Also speaking, the PENCAN President, Mrs. Nana Musa thanked the PenOp for the parley.

She said, the micro pension scheme is underreported therefore, there is a need to create more awareness about the scheme in the coming year by consistently reporting it.



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