How pension funds are managed?

How pension funds are managed?

Pension fund assets must be managed with the intent of ensuring that eligible retirees receive the benefits they were promised. Until relatively recently, pensions funds invested primarily in stocks and bonds, often using a liability-matching strategy.

What are the functions of pension fund administration?

PENSION FUND ADMINISTRATORS (PFA) The main functions of the PFA are to open Retirement Savings Account (RSA) for employees; invest and manage pension fund assets; payment of retirement benefits and accounting for all transactions relating to the pension funds under their management.

What is pension fund risk?

Corporate executives have traditionally defined pension fund risk in terms of a trade-off between risk and return on the assets built up against their fund obligations. But assets do not exist in a vacuum, seeking return and avoiding risk for their own sake.

How do pension funds manage risk?

In DB pension funds, risk management involves the measurement and assessment of pension fund risks and the design, monitoring and revision of the fund’s parameters (contributions, benefits, and investments) in order to address these risks in line with the funds’ objectives. Minimising the pension cost to contributors.

Which is the best pension fund administrator in Nigeria?

Overall best-performing PFAs year-to-date

• Third Position: ARM Pension Managers Limited.
• Second Position: Veritas Glanvills Pensions Limited.
• First Position: Tangerine Pensions.
• Third Position: Veritas Glanvills Pensions Limited.
• Second Position: Sigma Pensions Limited.
• First Position: First Guarantee Pension Limited.

What is the difference between mutual funds and pension funds?

Both mutual and pension funds are investment vehicles, professionally managed, and formed by the resources invested by a set of different investors; however, while mutual funds are a channel for retail investors to participate in capital markets (their sole purpose is to profit), pension funds are designed to cover the …

How many pension fund administrators do we have in Nigeria?

There are currently four (4) PFCs in Nigeria and ARM Pensions uses UBA Pensions Custodian Limited for its RSA Fund and Zenith Pension Custodian Limited for its Retiree Fund.

What are investment risks?

Definition: Investment risk can be defined as the probability or likelihood of occurrence of losses relative to the expected return on any particular investment. Most investors while making an investment consider less risk as favorable. The lesser the investment risk, more lucrative is the investment.

How does longevity risk affect individuals?

What Is Longevity Risk? Longevity risk refers to the chance that life expectancies and actual survival rates exceed expectations or pricing assumptions, resulting in greater-than-anticipated cash flow needs on the part of insurance companies or pension funds.

When can I withdraw from my pension fund administrator?

Once you reach your 55th birthday (57 from 2028) you can withdraw all of your pension fund. You can take up to 25% as a lump sum without paying tax, and will be charged at your usual rate for any subsequent withdrawals.

What is the difference between pension fund administrator and pension fund custodian?

WHAT IS THE DIFFERENCE BETWEEN A PFA AND A PFC? The PFA manages the pension funds through various investments in accordance with the investment guidelines by the PenCom while the PFC is the custodian of the pension funds assets and acts to the order of the PFA in line with regulations.

How has covid-19 affected pension fund administrators in Nigeria?

Despite the disruptions caused by the COVID-19 pandemic, which affected most aspects of the Nigerian economy, Pension Fund Administrators (PFAs) in Nigeria performed satisfactorily, as they recorded positive returns between January and August 2020.

What is the contributory pension scheme in Nigeria?

In Nigeria, the requirement for the Contributory Pension Scheme is that the pension funds are to be privately and exclusively managed by licensed Pension Fund Administrators (PFA).

Which are the top 10 private pension funds in Nigeria?

Radix Pension Fund Managers Limited, Stanbic IBTC Pension Managers Limited, Sigma Pensions Limited, OAK Pensions Limited, AXA Mansard Pension Managers Limited, NPF Pensions Limited, Crusader Sterling Pensions Limited, and Nigerian University Pension Management Limited dominated the list in one fund.

What is ‘risk-based supervision’ for pension funds?

Risk-based supervision allows much of the responsibility for risk management to rest with the individual pension fund companies themselves, while the supervisory agency verifies the quality of the fund’s risk management processes and adapts its regulatory stance in response.