INVESTMENTS AND FINANCING CONSTRAINTS: A LESSON TO NIGERIAN PENSION FUND ADMINISTRATORS

A pension system is essentially an income security program, which provides benefits to beneficiaries who may be retirees, pensioners or the destitute. This paper reviews the investments and financial constraints of pension funds from various countries worldwide with the aim of serving as a lesson to the Nigerian pension funds. The paper uses a conceptual approach by employing a literature-based methodology. As such, this study brings its conclusions on deductions made from the reviewed literature, which forms the basis for the proffered recommendations. The study finds that individual country adopts a pension program that suits its economy and easy to implement. As such, the pension reforms embark upon by each country is a going concern. In conclusion, Nigeria, as a country that adopts a contributory pension scheme has a lot of programs to borrow from advanced countries especially Chile and Peru. The paper, therefore, recommends amongst others, that, with recent crises in advanced countries such as Argentina, pension fund administrators should not invest the whole of their assets in government bonds rather; the fraction of assets invested in equities should decline with age.