Originally Posted by overload
but how do we mitigate against wrong bettings? does anyone check what they are betting on with our funds?
Yes. There is a strict investment guideline that PFAs have to adhere to. This guideline ensure that the funds are diversified across various asset classes. Maximum of 25% can be directly invested in equities and maximum of 80% can be invested in FGN bonds (which is the safest asset in Nigeria). There are also also limits to other asset classes such as private equity, exchange traded funds, Eurobonds, GDR, GDN, etc. This diversification reduce the propensity of unnecessarily taking huge bets with the funds.
If a PFA returns more than or less than 20% above or below the median PFA return on any month, Pencom will take a walk to the PFA to see what they are doing to generate such gains or losses. It is all about the safety of pension assets.
You can check out Pencom.gov.ng to download the latest investment guidelines.