CPS and PenCom Information Dashboard

As CPS enters its 21st year of practice in Nigeria, the National Pension Commission recently encapsulates achievements since inception in a platform it tagged Pension Industry Dashboard, Ebere Nwoji reports

Stakeholders in pension industry in June last year celebrated 20 years anniversary of contributory Pension scheme regime in Nigeria, saying it was a period of gainful reforms in the pension industry.

As the sector marches into 2st year, operators flashed back at major achievements recorded by the sector. The industry regulator, the National Pension Commission (PenCom), in its bid to encapsulate these achievements, developed a comprehensive information box tagged, “The Pension Industry Information Dashboard,” which according to the commission offers a comprehensive, user-friendly overview of historical vital pension statistics.

PenCom said the dashboard aimed to enhance data transparency and provide stakeholders with an insightful, accessible tool for monitoring and analysing Nigerian pension trends over time.

In the latest edition of the dashboard the commission captured major achievements made in the industry since inception as well as growth recorded by the sector in the past five years after the COVID-19 period.

The dashboard also provided an overview of the pension industry in the Q3 2024, saying assets under management stands at N21.38 trillion as at October 2024 while a total of 10.5 million workers have registered in the CPS scheme 48 percent of these were from private sector while 52 percent came from public sector.

Assets under management

According to PenCom, the accumulated N21.38 trillion were invested in various asset classes in the following order:  Infrastructural fund took N216.11 billion, private equity took N96.95 billion, Mutual fund N106.16 billion, Money  Market securities took N2,040.90, Supra -National bond took N23.48, corporate debt securities took  2,249.12, state government securities took N 258.48billion Federal government securities took the lion share of N13,468.16trillio. While equities took N2,324.41 trillion bringing total assets under management to N21.38 trillion as at October 2024.

Regarding monthly pension payment, the commission said a total of N 8,572.28 billion were paid by the PFAs under programme withdrawal while the sum of N 17,341.65 billion were paid under annuity. Total lump sum paid under programme withdrawal was N 55,374.22, billion while total lump sum paid under annuity stood at N 1,141,684.00.billion.

RSA Registration

Regarding retirement savings account registration, the commission said  by Q3 2024, there were 10,536,088 registered retirement savings accounts (RSAs), holders representing a growing adoption of the pension system. 

According to the commission, highlights include 118,339 new RSA registrations in the year-to-date period for 2024, reflecting consistent awareness and inclusion efforts.

It said over the past five years, RSA registration increased by 13.93 percent from 9,215,788 in Q4 2020 to 10,499,358 in Q3 2024. According to the commission, out of these, 61 percent were male and 38 percent were female. The commission said in terms of contributed funds, 

cumulative contributions since the inception of the Contributory Pension Scheme (CPS) stood at N10.97 trillion as at Q3,2024, with Public sector contributing N5.71 trillion, while Private sector contributed N5.25 trillion.

Micro Pension scheme

On the performance of the Micro pension plan which the commission launched in 2019, the commission said the total Micro Pension Registration count from inception to Q3 2024 stood at 164,031.

It said specifically, the number of informal sector workers with funded RSAs was 12,241.

From 2020 to Q3 2024, the number of funded RSA registration increased by 5,971.

The total amount saved in the RSAs of Micro Pension Participants was N967,194,762.23 as of Q3 2024, which represented a growth of N878,065,827.85 from the 2020 figure of N89,128,934.38.

Accrued Rights

Regarding Accrued Rights payment which are the accumulated pension benefits for employees of FGN Treasury funded MDAs, from their date of first employment up to June 30, 2004 (before the Contributory Pension scheme, the commission said in 2020, a total of 11,385 benefited from the total sum of N57.84billion paid by the federal government.

 The commission said in 2021 a total of 13,045 people benefited from the N62.33 billion paid by the federal government while in 2022, a total of 11,551 workers benefited from N 54.66 billion paid by government. In 2023, a total 14,873 benefited from the sum of N 61.71 Accrued right paid by government.

RSA Transfers

The Pension Reform Act stipulates that an RSA holder is statutorily allowed to transfer his/her RSA from one PFA to another once in a year. The RSA transfer system enabled greater flexibility for contributors.

PenCom said since after flagging off the transfer window, N1.26 trillion have exchanged hands. These, it said, were transferred on behalf of a total number of 289,545 RSA holders who migrated from one PFA to another as of Q3 2024.

With these achievements, both the operators and regulator agreed that the pension sector has indeed recorded tremendous growth in the past 20 years and are optimistic that as the sector commences another journey into the future, the next 20 years will reposition the sector as the beacon of other finance service sector of the economy.

Challenges

They however said despite these achievements, one of the major challenges of the pension sector has remained the need to get many Nigerians see the value of financial planning through pension savings. They regretted that after these 20 years of existence, many Nigerians know little or nothing about financial planning through pension savings.

This, they said, has thrown up a big challenge for the operators to embark on massive awareness campaign of which PenCom, Pension Fund operators (PenOp) should be at the fore front. This, they added, would grow the Micro pension scheme which the operators have been striving to push but have not achieved the desired result.