PenCom endorses call for use of pension assets for housing devt

BY MADUKA NWEKE

The Director General, Pension Commission (PenCom), Mrs. Chinelo Anohu-Amazu, has said that any effort geared towards increasing housing development through mortgage financing for the purpose of ameliorating housing deficit in the country will always receive the commission’s support.

Anohu-Amazu said during a public function in Lagos recently that housing deficit remains a major problem facing Africans, adding that in Nigeria, this cuts across all the states of the federation with many people living on the streets while most workers cannot afford decent homes.

The DG noted that some resorted to borrowing from banks at very high interest rate to build their homes only to lose these houses to banks for being unable to repay the loans with accumulated interests in full.

It is obvious that Nigerian workers, represented by the Nigeria Labour Congress (NLC), are in support of using pension funds to provide houses for them. They say this is the best way to deploy pension funds to benefit contributors directly.

She noted that instead of borrowing from banks at exorbitant rates, lending pension money to contributors could help in providing soft landing to the public who choose the contributory scheme as a way of saving money.

Underscoring the need for pension fund managers to channel pension asset to finance housing for workers, the Chief Executive Officer of the Kenyan Retirement Benefits Authority and Chairman of the International Organisation of Pension Supervisors (IOPS), Dr. Edward Odundo, observed that houses are expensive when mortgage institutions and other intermediaries build to sell to workers.

For this reason, Kenyan workers are allowed to borrow from their retirement savings to build houses at friendly interest rates, using accumulated savings as collateral.

To this end, it is being argued that pension stakeholders in Nigeria should make it possible for retirement savings account (RSA) holders to borrow from the scheme to meet specific infrastructure needs.

Odundo said that a contributor who has N10 million in his RSA and needs N5 million to build a house should be allowed to borrow from his accumulated savings instead of going to the bank to borrow N5 million to build a house at 30 per cent interest rate, or buy a house worth N5 million at N8 million from mortgage institutions.