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Pension fund assets now worth N13.88tr

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Pension fund assets rise by N453.8b 

By Jeph Ajobaju, Chief Copy Editor

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Pension fund assets grew by N453.8 billion to a historic N13.88 trillion in the first of quarter of the year ended March 2022 (Q1 2022), and assets under management rose 3.38 per cent above N13.4 billion in December 2021.

Data compiled by the National Pension Commission (PenCom) also shows that 12,336 Pension Fund Administrator (PFA) contributors switched their Retirement Savings Accounts (RSAs) between PFAs in Q1 2022.

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This is 4.2 per cent lower than the 12,874 who switched in Q4 2021 and brings the total number of transferred RSAs to 63,728 since Q4 2020.

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Below is a further breakdown of the assets in Q1 2022:

  • RSA Fund II – N6.06 trillion (43.6 per cent of the total)
  • RSA Fund III – N3.69 trillion (26.7 per cent). Up by N158 billion
  • Existing schemes – N1.42 trillion (10.2 per cent). Up by N64.56 billion
  • Contributory Pension Fund Assets (CPFAs) – N1.54 trillion (11.1 per cent)

PFA investment in corporate debt securities rose to N1.01 trillion from N943.3 billion in Q4 2021. Up by N63.78 billion.

Investment in federal government securities amounted to N8.5 trillion. Down by 271.56 billion. Although FGN Securities take most of the investment by PFAs.

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Investment in real estate totalled N156.39 billion against N156.8 billion in Q4 2021. Up by N401.3 million.

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Investment in local equities grows by N28.95b

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PFAs in Q1 2022 increased their investment in the local equities market, with over N28.95 billion new investments, bringing the total to N944.26 billion; per reporting by Nairametrics.

The improved interest in the equities market follows the positive performance of the Nigerian stock market year-to-date.

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However, PFAs reduced their exposure in foreign equities by N10.22 billion to stand at N112.27 billion.

PFAs are improving their returns by diversifying investment portfolios to give more value to their contributors, especially with the transfer window still in play which allows contributors to switch PFAs whose services they are not satisfied with.

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Pension industry

The pension industry continues to grow in value and in adoption, albeit very low compared with other economies.

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The total number of pension contributors at 9.56 million only represents a pension penetration rate of 14 per cent compared with over 19 per cent in South Africa and 77 per cent in the United Kingdom.

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