The National Pension Commission (PenCom) has introduced a Non-interest Fund (Fund VI) for contributors under the Contributory Pension Scheme. Also, PenCom issued an operational framework for it pension contributors and retirees.
In a statement issued by PenCom on Wednesday, the move is expected to take care of those who believe in ethical financial instruments under the provisions of Islamic Commercial Jurisprudence and any other established non-interest principles, as approved by the Financial Regulatory Advisory Council of Experts.
The head, corporate communications of PenCom, Peter Aghahowa, made the disclosure in a statement made available to newsmen on Thursday in Lagos, according to NAN.
He said, “the Non-Interest Fund is a fund that complies with the provisions of Islamic Commercial Jurisprudence and any other established non-interest principles, as approved by the Financial Regulation Advisory Council of Experts (FRACE) or any other body constituted by the Central Bank of Nigeria and the Securities and Exchange Commission from time to time.
“The FRACE has certified that the operational framework issued by the commission complies with non-interest (Shari’ah) finance principles,” he said.
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PenCom urged all Pension Fund Administrators (PFAs) to create and maintain the Non-Interest Fund (Fund VI) for interested Retirement Savings Account (RSA) holders. The Commission stated that the Fund will be separated into two funds for Active RSA holders and Retirees respectively.
“RSA holders in Fund I, II, III and retirees in Fund IV are eligible to move their RSA contributions to the Non-Interest Fund (Fund VI) by making a formal request to the PFA in line with the provisions of the RSA Multi-fund Implementation Guidelines and Section 7.6 of the investment regulation dealing with transfers between fund types within a PFA.
“The Non-Interest Fund offers a viable alternative to the conventional interest-based financial instruments for pension funds investment,” he said.
