The Multi-Fund Structure was introduced by the National Pension Commission (PenCom) through its guidelines on investment of Pension Fund Assets for pension operators (Multi-Fund Structure) to replace the existing structure that puts funds for all active contributors into one RSA Fund without considering age or risk profile of the contributors under this fund.

The new structure has been designed to allow Pension Fund Administrators (PFAs) to invest Pension Fund assets in line with the age profile and risk tolerance levels of their various contributors. The effective take-off date of the RSA Multi-Fund Structure shall be July 1, 2018.

PFAs shall create and maintain five RSA Funds as follows:

Fund I: This is strictly by choice or on request but not accessible to Retirees and active contributors of 50 years and above.

Fund II:Default Fund for RSA holders that are 49 years and below.

Fund III:Default Fund for RSA holders that are 50 years and below.

Fund IV:Only for Retirees.

Fund V:Micro Pension participants (informal sector).

Fund VI:(Non-Interest or Ethical Fund)

Features of the Funds

  1. Fund I
    • The fund was created in 2018 with nominal value of an Accounting Unit (VAUF) or Unit Price of N1.0000 at the commencement (take-off) date.
    • PFAs shall redeem units from the RSA ‘Active’ Fund in respect of contributors that are 49 years and below, who have formally applied to be moved to Fund I. The Naira value of the balance in their RSAs shall be transferred to purchase units in Fund I at the nominal Unit Price of N1.0000 on the effective take-off date (1st day of effective implementation of the Multi-fund Structure).
    • Subsequent entrants into Fund I after the take-off date shall buy into the Fund at the Value of an Accounting Unit of the preceding day.
    • NOT accessible to Retirees and active contributors of 50 years and above.
  1. Fund II
    • This is the current RSA ‘Active’ Fund and shall be known as “Fund II”. This is the default Fund for contributors that are within the age bracket of 49 years and below.
    • Fund II shall continue to maintain the Value of an Accounting Unit (VAUF) of the current RSA ‘Active’ Fund, which is computed because of the Net Assets Value and the total number of Accounting Units outstanding..
    • Members of Fund II (49 years and below) are allowed to move to Fund I, based on a formal application.
  1. Fund III
    • New entrants into Fund III after the take-off date shall buy into the Fund at the Value of an Accounting Unit of the preceding day.
    • Members of Fund III (50 years and above) shall not be allowed to move to Fund I. However, members of Fund III can move to Fund II, if they so wish.

PFAs shall maintain the RSA Retiree Fund to be known as “Fund IV”. Fund IV shall continue to be maintained in accordance with the Guidelines on Retiree Fund.

  1. Fund IV
    • Active contributors (members of Funds I, II, and III) are not eligible to buy into Fund IV, except upon retirement.
    • Members of Fund IV are not allowed to move out of the Fund. Contributors that wish to move to a new Fund shall be required to indicate their choice in writing to the PFA. The PFA shall thereafter transfer/buy into the indicated Fund at the opening Value of an Accounting Unit of the Fund on the date of transfer.

This is the micro pension fund for those in the informal sector

  1. Fund V

The Fund VI is based on the principles of Wakala Bil-Istithmar (Investment Agency Contract) with Tangerine APT Pensions acting as the Investment Agent for active RSA contributors in the Fund. However, the principle of ‘Mudarabah’ contract (profit-sharing and loss-bearing partnership) shall be used for retirees in Fund IV who opted for Fund VI Fund VI shall be separated into two; Active RSA holders and Retirees. Tangerine APT Pensions shall manage and invest the assets of the funds separately in accordance with the rules outlined by the framework and regulations issued by the National Pension Commission (PenCom). The differentiating factor with other funds under the multi-fund structure is that it allows investment to be made only in permissible ethical instruments, such as government backed Islamic Treasury Bills and Infrastructure Sukuk, Corporate Sukuk, Sharia’h compliant ordinary shares (including Global Depositary Receipts) and money market instruments, Sharia’h compliant infrastructure and private equity funds etc. Fund VI assets are to be invested in instruments that are free from speculation and uncertainty, which might lead to destruction or loss, otherwise known as 'Gharar' under the Islamic Commercial Jurisprudence. The Fund’s assets shall not be invested in the production or trading in alcohol, pornography, weaponry, gambling and betting

  1. Fund VI

Investment Management of the Funds

The investment of pension fund assets in the various Funds shall be in accordance with the Regulation on Investment of Pension Fund Assets, issued by the Commission.

The following investment structure shall apply in accordance with the Regulation on Investment of Pension Fund Assets issued by the Commission.

  1. Fund I: The maximum/minimum exposure to variable investment instruments shall be 75%/20% of the portfolio value.
  2. Fund II: The maximum/minimum exposure to variable investment instruments shall be 55%/10% of the portfolio value.
  3. Fund III: The maximum/minimum exposure to variable investment instruments shall be 20%/5% of the portfolio value.
  4. Fund IV: The maximum/minimum exposure to variable investment instruments shall be 10%/0% of the portfolio value.
  5. Fund V: The maximum exposure to variable investment instruments shall be 5% of the portfolio value.
  6. Fund VI: The maximum exposure to variable investment instruments shall be 55% of the portfolio value.