PENSION GROUP PUSHES FOR INFLATION INDEXED BONDS

The Pension Fund Operators Association of Nigeria, PenOp, has recommended inflation indexed bonds for investment of pension assets to hedge against devaluation of the assets.

According to PenOp, issuing inflation indexed bonds will also protect the savings of the country from inflation and devaluation.

Speaking during the 4th PenOp National Assembly Retreat organised for members of the House Committee on Pensions and members of the Senate Committee on Establishment and Public Service in Lagos, a member of PenOp, Dave Uduanu, a member of PenOp, said that the practice is carried out by governments in some countries across the world to track inflation rate.

Uduanu stated that in other countries, there are bonds that government issue where the coupon tracks inflation rate and indexed at inflation plus two per cent such that when inflation is 14 per cent, the bond will yield 16 per cent.

Government he said can create more infrastructure funds to invest the pension assets as real estate assets can hedge against inflation.