Pension fund assets rise by N453.8 billion
By Jeph Ajobaju, Editor-in-Chief
Pension fund assets increased by N453.8 billion to a historic high of N13.88 trillion during the first quarter of the year ended March 2022 (Q1 2022), and assets under management rose 3.38% above N13.4 billion in December 2021.
Data compiled by the National Pensions Commission (PenCom) also shows that 12,336 contributors of Pension Fund Trustees (PFAs) switched their Retirement Savings Accounts (RSAs) between PFAs in the first quarter of 2022.
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This is 4.2% less than the 12,874 that changed in Q4 2021 and brings the total number of RSAs transferred to 63,728 since Q4 2020.
Below is a more detailed breakdown of assets in the first quarter of 2022:
- RSA Fund II – N6.06 trillion (43.6% of total)
- RSA Fund III – N3.69 trillion (26.7%). Up N158 billion
- Existing schemes – N1.42 trillion (10.2%). Up N64.56 billion
- Contributory Pension Fund Assets (CPFA) – N1.54 trillion (11.1%)
PFA investment in corporate debt securities increased to N1,010 billion from N943.3 billion in the fourth quarter of 2021. Up N63.78 billion.
Investments in federal government securities amounted to N8.5 trillion. Down 271.56 billion. Although FGN Securities captures the bulk of PFA investments.
Investments in real estate totaled N156.39 billion compared to N156.8 billion in the fourth quarter of 2021. Up N401.3 million.
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Investment in local equities increases by N28.95 billion
In the first quarter of 2022, PFAs increased their investments in the local equity market, with more than 28.95 billion naira in new investments, bringing the total to 944.26 billion naira; by declaration by Nairametry.
The improved interest in the equity market follows the positive performance of the Nigerian stock market since the start of the year.
However, the PFAs reduced their foreign equity exposure by N10.22 billion to N112.27 billion.
PFAs improve 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 change PFAs whose services do not satisfy them.
The repo industry continues to grow in value and adoption, although very small compared to other economies.
The total number of pension contributors, at 9.56 million, represents a pension penetration rate of only 14%, compared to over 19% in South Africa and 77% in the United Kingdom.