Multifund
The Multi-Fund Investment Structure (MFIS) is an innovation by the National Pension Commission (PenCom) that provides a framework enabling pension contributors to have a guided say in the choice of the nature of investment assets which their contributions can be invested in.
Inception in 2005, contributors have always been grouped into two, namely, the RSA Fund for active contributors and the Retiree Fund for those who have retired from active service.
The essential difference between the two Funds was that the RSA Fund was allowed to have a higher content of risky assets than the Retiree Fund. The risk content has to do with the percentage of assets in the portfolio with variable incomes.
It is generally believed that the higher the risk in an asset class, the higher the income. On this premise, the argument has been that while some people prefer higher risks so as to predispose them to higher income, there are different levels of risk preference or appetite for different people.
Some people therefore felt that restricting contributors to the above two categories was not fair enough, prompting PenCom to think of ways of increasing the number of Funds to accommodate more shades of contributors.
In line with the above thinking, PenCom has created four different Funds, namely, Fund I, Fund II, Fund III and Fund IV and PFAs are required to transfer, in accordance with the guidelines, contributors in the previous two groups into the newly created four Funds, effective July 1, 2018. The existing RSA (Active) Fund is now to be replaced with Funds I – III, while the Retiree Fund now becomes Fund IV.
Inception in 2005, contributors have always been grouped into two, namely, the RSA Fund for active contributors and the Retiree Fund for those who have retired from active service.
The essential difference between the two Funds was that the RSA Fund was allowed to have a higher content of risky assets than the Retiree Fund. The risk content has to do with the percentage of assets in the portfolio with variable incomes.
It is generally believed that the higher the risk in an asset class, the higher the income. On this premise, the argument has been that while some people prefer higher risks so as to predispose them to higher income, there are different levels of risk preference or appetite for different people.
Some people therefore felt that restricting contributors to the above two categories was not fair enough, prompting PenCom to think of ways of increasing the number of Funds to accommodate more shades of contributors.
In line with the above thinking, PenCom has created four different Funds, namely, Fund I, Fund II, Fund III and Fund IV and PFAs are required to transfer, in accordance with the guidelines, contributors in the previous two groups into the newly created four Funds, effective July 1, 2018. The existing RSA (Active) Fund is now to be replaced with Funds I – III, while the Retiree Fund now becomes Fund IV.
- Subscribers must be below 50 years
- Must request to be moved to this Fund
- Only subscribers in Fund II can move to Fund I
- Will be more aggressive in terms of asset allocation
- More risky assets included and thus, more target returns
- Minimum of 20% of assets will be invested in variable income assets
- Maximum of 70% of assets can be invested in variable income assets.
- Subscribers must be below 50 years and will be moved into this fund automatically except they indicate otherwise
- Can only move to Fund I
- Will be moderately aggressive in terms of asset allocation
- Minimum of 10% of assets will be invested in variable income assets
- Maximum of 55% of assets can be invested in variable income assets
- Returns will most likely replicate the current RSA Fund’s ROI
- Subscribers must be 50 years and above and will be moved into this fund automatically except they indicate otherwise
- Can only move to Fund II [but not Fund I]
- Will be more conservative in terms of asset allocation
- Minimum of 5% of assets will be invested in variable assets
- Maximum of 20% of assets can be invested in variable assets
- This is the current Retiree Fund
- Operated in accordance with guidelines of the existing Retiree Fund
- Subscribers cannot move to Funds I, II or III
- Will be more conservative in terms of asset allocation
- Minimum of 0% of assets will be invested in variable assets
- Maximum of 10% of assets can be invested in variable assets
- Returns will be similar to the existing Retiree Fund’s
- Designed for contributors in the Personal Pension Plan who prefer a lower-risk investment approach.
- Suitable for individuals seeking stable, steady growth with a primary focus on capital preservation.
- Will be conservatively managed to protect retirement savings from market volatility.
- Minimum of 5% of assets will be invested in variable income assets.
- Maximum of 30% of assets can be invested in variable income assets.
- Allows flexible contingent withdrawals from the accessible portion of the savings to meet immediate, short-term financial needs.
- Provides contributors with a flexible opportunity to save towards retirement while maintaining a high level of security.
- Designed for contributors in the Personal Pension Plan looking to maximize their returns over a longer horizon.
- Suitable for individuals making Voluntary Contributions or self-employed workers with a higher risk appetite.
- Will be actively managed to capture competitive market growth while balancing calculated risks.
- Minimum of 10% of assets will be invested in variable income assets.
- Maximum of 55% of assets can be invested in variable income assets.
- Offers withdrawal flexibility, allowing contributors to easily access their contingent funds for unexpected expenses while the remainder continues to accumulate aggressive growth.
- Provides an open, flexible vehicle for anyone to aggressively boost their retirement savings and grow wealth faster.
- Designed for contributors seeking a non-interest (Sharia-compliant) pension fund.
- Suitable for contributors with medium to long-term investment objectives.
- Investments will comply with approved non-interest investment principles.
- Minimum of 10% of assets will be invested in variable income assets.
- Maximum of 55% of assets can be invested in variable income assets.
- Offers contributors the opportunity to grow their retirement savings while adhering to their ethical or religious investment preferences.
- Designed for retirees who prefer a non-interest (Sharia-compliant) pension fund.
- Managed with a focus on capital preservation and liquidity.
- Investments will comply with approved non-interest investment principles.
- Structured to meet the income and liquidity needs of retirees.
- Will maintain a conservative asset allocation strategy.
- Suitable for retirees seeking stability while remaining compliant with their investment beliefs.
- Designed for diaspora workers, local professionals earning in foreign currency, and expats in Nigeria
- Allows contributors to save, invest, and grow their retirement funds directly in US Dollars (USD)
- Mitigates inflation and protects retirement savings from local currency depreciation and exchange rate volatility
- Invests exclusively in secure, regulated dollar-denominated assets such as Eurobonds and foreign money market instruments
- Features a flexible structure where 60% is accessible for contingent withdrawals and 40% is preserved for retirement
- Offers retirees the choice to receive their final retirement benefits directly in USD payouts
Why choose us as your PFA?
Our commitment is to provide safe and rewarding pension services that not only secure the financial future of our beneficiaries but also contribute to their overall happiness and peace of mind, fostering a retirement filled with comfort, joy, and the assurance that their needs are well cared for.
- Experienced professionals providing precise pension fund management.
- Diverse services: retirement planning, fund management, financial advice.
- Consistent, reliable returns for a secure and prosperous retirement.