Pension Asset gains N843 bn in 6 months, hit record high of N14. 27 trn

By Favour Nnabugwu



Nigeria’s pension fund assets rose by N842.7 billion in the first half of the year, hitting a record high of N14.27 trillion from N13.42 billion recorded at the beginning of the year, according to a report released by the National Pension Commission (PenCom).

On the other hand, a total of 27,157 RSA contributors switched their pension managers between January and June 2022, bringing the total number of RSA transfers processed by the Commission to 78,549 since the opening of the transfer window.

Since the launch of the PFA transfer window, which gives an opportunity for Retirement Savings Account (RSA) holders to switch from one pension fund administrator to another, Q1 2022 recorded the highest quarterly movements, increasing by 20.1 percent quarter-on-quarter, an indication of how competitive the industry has become.

Meanwhile, RSA registrations increased by 2.8 percent to stand at 9.79 million from 9.53 million recorded as of December 2021, which represents an increase of 266,830 new RSA registrations in six months.
Total pension funds increased by 6.28 percent from N13.42 trillion as of December 2021 to N14.27 trillion as of June 2022.

Investments in corporate debt securities rose significantly by 26.11 percent to N1.19 trillion in the review period (year-to-date).
PFAs increased their investments in real estate by 50.66 percent to N236.2 billion as of June 2022 from N156.8 billion recorded as of the beginning of the year.

Investments in private equity funds dipped slightly by 0.24 percent to stand at N38.87 billion from N38.96 billion.
Meanwhile, PFA allocations to FGN securities stood at N9.01 trillion, a 2.67 percent increase from N8.77 trillion in December 2021. It is worth adding that investments in FGN securities accounted for about 63 percent of the total pension fund.

This is likely to continue considering the growth in the interest rates of the FGN Bonds and BN Treasury Bills, which have been recording significant oversubscriptions.

A major incentive is that FGN securities are safer than other variable assets, which most RSA funds are averse to.
The RSA fund II accounted for most of the fund contribution with N6.24 trillion, representing 43.7 percent of the total pension funds, followed by RSA Fund III with N3.86 trillion, which represents 27 percent of the total assets.