Push for development: Pension fund likely to be invested in energy sector

The law does not allow investment in real estate or infrastructure.

LAHORE:

The Punjab government is likely to invest the Punjab Pension Fund’s capital (PPF) in the energy sector, The Express Tribune has learnt.

PPF General Manager Aqeel Raza Khoja said the proposal was at an initial stage and the government held the authority to make the final decision.

Khoja also said that in order to invest PPF’s capital in energy sector infrastructure development, the investment policy of the fund and the Punjab Pension Fund Act 2007would have to be amended

The PPF is a corporate body constituted under the Punjab Pension Fund Act 2007 intended to generate revenue for retired government employees’ pensions, a PPF official said.

Under the Act, a management committee headed by the finance minister is the decision making body of the PPF.

In 2008, it drafted an investment policy to generate revenue and profit to meet pension liabilities.

The chief minister had directed the finance department to find resources for the government’s share in a joint venture with a Chinese company for infrastructure development in the energy sector. The Finance Department consented to provide Rs220 million for investment from the PPF, a finance department official said.

According to the Punjab Pension Fund Investment Policy 2008, the fund can be invested in securities, bonds and saving schemes but not in land, building or real estate of any kind, exploration of minerals, petroleum or commodities either.

A senior official of the PPF said the law did not allow investment in infrastructure development.

The proposal will be sent to the management committee for discussion and they will make a decision regarding how to proceed, he said.

The PPF has Rs21 billion and has to meet the pension liabilities of about 475,000 retired employees. It is currently paying about Rs5.75 billion a month.

The PPF has invested most of the capital in the Pakistan Investment Bond, National Savings, Treasury Bills and Term Finance Certificates. The average return has been calculated at 13.67 per cent for the last five years.

Published in The Express Tribune, April 25^th, 2014.