As of the end of October 2022, Nigeria’s total pension fund assets increased by 1.14 percent to a record high of N14.59 trillion, up from the N14.42 trillion reported the month before.
This was contained in the monthly pension fund industry report released by the National Pension Commission (PenCom) for January and October 2022.
While the fund gained N170 billion, it has increased by a whopping N1.16 trillion from the level it was in December last year.
The number of Retirement Savings Account (RSA) registrations jumped to 9.85 million in the review month, up from 9.79 million registrations recorded as of the end of the previous month.
A total of 30,973 RSA holders switched their pension fund administrators in the third quarter of 2022, representing an increase of 109 per cent compared to the 14,821 holders that switched in the previous quarter.
Investments in corporate debt securities by the PFAs rose by 2.64 per cent month-on-month to stand at N1.53 trillion from N1.49 trillion recorded in the previous month.
On the other hand, PFAs reduced their investments in real estate by 4.93 per cent to N218.1 billion as of October 2022 from N229.4 billion recorded as of the beginning of the month.
The RSA fund II still accounted for most of the fund contribution with N6.35 trillion, representing 43.5 per cent of the total pension funds, followed by RSA Fund III with N4.05 trillion, which represents 27.8 per cent of the total assets.
Meanwhile, existing schemes accounted for 9.9 per cent of the total funds, increasing by N2.41 billion in October 2022 to stand at N1.44 trillion, while the CPFAs accounted for 10.2 per cent of the total funds, standing at N1.48 trillion as of the review period.
Investments in the local stock market dropped by N40.41 billion to stand at N828.17 billion as of the end of October 2022. This happened amid a heavy inflation rate and a hike in interest rates.
On the other hand, investments in federal government debt securities continue to increase as the CBN raised the monetary policy rate to 16.5 per cent in its last MPC meeting, which translates to higher returns in the fixed-income market.
Specifically, total allocation in FGN securities by the pension industry stood at N9.23 trillion as of the review month, accounting for 63.2 per cent of the total funds. Further checks showed that a sum of N8.84 trillion is being invested in federal government bonds.
Due to several mergers and acquisitions, the number of registered PFAs dropped from 22 to 20 as the PFAs worked to reach the minimum regulatory capital requirement of N5 billion, which was raised from N1 billion by the Nigerian Pension Commission.
In addition, the overall pension fund increased by N156.74 billion in the third quarter of 2022, reaching N14.42 trillion by September 2022.
With an average ROI of 2.38 percent, First Guarantee Pension topped the list of top-performing PFAs in Q3 2022. It was followed by Premium Pensions and Veritas Glanvills Pensions, which had average returns of 2.06 percent and 2.01 percent, correspondingly.
