Q3 2022 marked another impressive quarter for pension assets growth in Nigeria.
In that period, pension fund assets grew by N156.74bn ($348.3m) to N14.42trn ($32bn). However, the composition of pension assets has broadly remained the same.
Active Retirement Savings Account (RSA) funds ((I, II, III, V & VI) accounted for 71.48% of all pension fund assets. The Active funds relate to contributors who are still in active employment and their employers are still making regular contributions to therewith Pension Fund Administrators (PFAs). Funds managed by Closed Pension Fund Administrators (CPFAs) accounted for 10.32% of all pension fund assets under management. CPFAs are pension funds that are managed by subsidiaries of some multinationals operating in Nigeria for the benefit of their staff. The balance of the pension assets relates to Retiree funds and this accounts for 8.02% (N 1.15trn) of pension assets as of Q3 2022. These are funds for those individuals that are already retired and are receiving regular pension payouts from the pension funds.
In another vein, what pension fund administrators in Nigeria invest in hasn't changed much quarter on quarter. As of September 2022, 63.7% of all pension funds assets in Nigeria were invested in largely Nigerian Government securities, while 14.42% was invested in Local Money Market Securities.
There is a gradual shift to invest in alternatives, but this has been slow, but ticking up slightly. We know this will pick up over the next couple of years as pension funds in Nigeria look to diversify further and earn more on the funds they manage.