Stanbic IBTC, FTSE establish benchmark for pension fund

As parts of efforts to effectively monitor pension funds in Nigeria, British index provider, FTSE Group, has partnered with a prominent pension management brand in the country, Stanbic IBTC, to establish the FTSE Nigeria Investable Pension Fund Benchmark, as a means to measure the performance of the equity portion of pension funds.

The global index provider, who made the announcement on Thursday, disclosed that the FTSE NIPF is comprised of Nigerian Stock Exchange’s listed equities alongside its constituents. The constituents, according to the group’s statement, have fully complied with the investment guidelines as stipulated by the National Pension Commission.

The benchmark constituents according to the FTSE, are comprised of the FTSE Frontier Index Series companies listed on the Nigerian Stock Exchange, which are screened for taxable profits, dividend, free float, sector and individual stock weighting.

FTSE further explained that the index methodology had been designed to adhere to PenCom’s Regulation on Investment of Pension Fund Assets, ensuring that a strong emphasis was placed on governance and best practice.

The FTSE group statement also stated that the group would be collaborating with Stanbic IBTC pension managers, acknowledging its outstanding achievements in Nigeria.

“It has been created as a replicable index as well as a performance benchmark, in close collaboration with Stanbic IBTC Pension Managers Ltd, Nigeria’s largest pension fund.

According to the Managing Director, Research and Analytics, FTSE, Jonathan Cooper, “Corporate governance plays a vital role in all equity markets and is integral to investor confidence, leading to significant demand for benchmarks of this nature.

“This is reflected in the Stanbic IBTC Pension Managers’ support during its development and immediate adoption on completion. We look forward to developing more indices for this exciting market.”

Also giving his remarks, The Chief Executive Officer, Stanbic IBTC Pension Managers Ltd, Demola Sogunle, was quoted to have said that Stanbic IBTC was committed to the growth and development of the financial market and was excited to be part of the project.

In his words, ““This commitment is part of the reason why we are very excited to be part of this development. The IPF is necessary for measurement of the performance of the equity portion of pension funds.

“It fulfils that need to have an index that is investable, transparent and independent. We believe that it will encourage more participation in the market as investors will be able to track companies that pension funds typically invest in.”

Also speaking on this new development, the Director-General, PenCom, ChineloAmazu, was quoted as saying, “The commission is delighted with this commendable initiative by the FTSE, as it would provide a good benchmark for Nigerian Pension Fund Administrators and PenCom to better assess and monitor the performance of the equities portfolio of individual pension funds.”