Pension Assets Up N568.33bn in 3 Months, Total Assets Now N14.99tn

Ebere Nwoji

The National Pension Commission (PenCom), has said that pension assets now stand at N14.99 trillion thus witnessing N568.33 billion growth within the space of three months from September 2022 when it stood at N14.42 trillion to N14.99 trillion as at 31 December 2022. 

The commission stated this in its last quarter 2022 report of Pension sector published in its official website.

Presenting the report, the Director General of PenCom, Aisha Dahir-Umar applauded the growth in the Assets Under Management of the sector adding that it pointed to the fact that the pension industry would continue to deliver value and benefit to its stakeholders and the nation’s economy.

“During the reporting period, the Commission stepped up its efforts to ensure sustainable investment by pension funds in alternative asset classes and structured infrastructure projects that meet the strict requirements of the Pension Fund Investments Regulation. We continued our efforts to ensure further diversification of investments in pension fund portfolio assets. While rising inflation continues to challenge the Nigerian economy, it should be noted that efforts are being made to ensure average annual pension fund returns for RSA and legacy funds exceed headline inflation, ”she said.

She said total pension contributions remitted to individual RSAs in Q4 2022 stood at N237.24 billion adding that out of this total, the public sector accounted for N129.06 billion or 54.40 per cent while the private sector contributed N108.18 billion or 45.60 per cent.

She said the cumulative pension contributions from inception to the end of the fourth quarter of 2022 amounted to N8.47 trillion, which is an increase from N8.23 trillion as at the end of Q3 2022.

According to her, the aggregate pension contributions of the public sector increased from N4.27 trillion in Q3 2022 to N4.40 trillion as at the end of Q4 2022, “Similarly, the aggregate pension contributions of the private sector also increased from N3.96 trillion in Q3.”

She said this total value of Pension fund, which was N14.99 trillion, comprised of N10.72 trillion: RSA ‘Active’ Funds (i.e. RSA Funds I, II III and V); N1.19 trillion: RSA Retiree Fund IV; N1.57 trillion: CPFAs; and N1.48 trillion.

She however said Approved Existing Schemes. Fund VI Active and Retiree Fund amounted to N36.20 billion

On structure of investments, the PenCom boss said Pension Fund Assets were mainly invested in federal government securities, which accounted for 64.33 per cent of total assets. The composition of investments in FGN Securities she said were as follows: FGN Bonds: 95.60 per cent, Treasury Bills: 2.06 per cent and Agency Bonds, Sukuk and Green Bonds accounting for 2.34 per cent.

She further said the industry’s Net Asset Value (NAV) as at reporting date increased by 3.94 (N568.33 billion) to N14.99 trillion compared to a NAV of N14.42 trillion as at 30 September, 2022.

“The growth in Q4:2022 was significantly higher than the growth of N156.74 billion (1.09%) recorded in Q3:2022. The growth was mainly due to contributions received and positive investment performance during the period, “she said.

On the success of the commission’s efforts to get state governments key into the scheme through enactment of their various state laws, implementation and migration of their workers to the Contributory Pension scheme from the Defined Benefit scheme, the PenCom DG said the number of states with laws on the CPS remained 25 as at Q4 2022.

She said out of these, seven states were at bill stage while five states had enacted Laws on the Contributory Defined Benefits Scheme (CDBS) with two out of these five namely Jigawa and Kano currently implementing the scheme.

She however said Kano was yet to transfer the pension assets to a Pension Fund Custodian while the other three states namely Gombe, Zamfara and Adamawa were yet to commence implementation of the CDBS. 

She said Lagos State Government had consistently failed to honour the N2 billion monthly commitment to clear the accrued rights of its retirees. 

According to the PenCom boss, as at the end of the 4th Quarter of 2022, there was no record of the state fulfilling its monthly commitment of remitting N2 billion for the months of October, November and December 2022. 

“Only a total sum of N7.83 billion was so far redeemed as against the expected sum of N26 billion during the period. This therefore leaves a cumulative shortfall of N18.17 billion that was yet to be redeemed as at the end of December 2022.