Leadway Pensure grew RSA fund II the most in the first half of the year, beating inflation to post the biggest return among biggest pension funds in the Nigerian Pension Industry.
The Pension Fund Administrator had an annualised return of 13.07 percent after unit price of Fund II rose 6.41 percent from N3.0931 on January 2. Also, Leadway Pensure noted an impressive annualized return of 12.6 percent in its fund III, while inflation stood at 11.4 percent.
BusinessDay analysis of the half-year return of five of the biggest Pension Fund Administrators (PFAs) based on available data reveals that these PFAs delivered an annualized average return of 11.666 percent on Fund II.
The choice of Fund II is based on the fact that the fund types dominate total RSA fundsFigures from the National Pension Commission (PenCom) reveal that total funds in RSA as at March 31, 2019, stood at N6.9 trillion, with Fund II (N4trn), followed by Fund III (N2.1trn), Fund IV (N732bn), and Fund I (N12.7bn)
Under the multi-fund structure introduced in 2018, the fund II type is meant for middle-aged contributors – below the age of 49 – and this accounts for 58 percent of the total RSA fund.
Taking account of inflation, which accelerated to 11.40 percent in May, a 0.03 percentage point higher than 11.37 percent in January, PFAs within the coverage of this analysis returned 5.69 percent on Fund II, with annualized returns of 11.666 percent.
Other biggest PFAs with annualized returns above inflation include Pension Alliance with 13.07, Premium Pension with 11.72 percent, Stanbic IBTC Pension Manager with 10.73 percent, and ARM Pensions Fund Manager with 9.75 percent. Bigger fund managers not included was due to unavailability of relevant data as at the time of research.
The five PFAs have a combined 64 percent market share in the pension industry, with Stanbic IBTC Pension leading the space with 37.2 percent. ARM Pension, Premium Pension, Trust Fund Pension has an individual market share of 8.8 percent, 7.9 percent, and 6.4 percent, respectively.
These are followed by Pension Alliance (4.78) and Leadway Pensure with 4.8 percent share.
Pension Assets jumped 4.5 percent to N9 trillion while Pension to GDP stood at 28.3 percent in Q1 2019 from 24.52 percent in Q4 2018. While in 2018, total Asset under Management (AUM) was N8.14trn ($26.6), more than the combined assets in Egypt, Ghana, and Kenya.
In the full year 2018, Nigeria’s pension to GDP was 6.7 percent. By comparison, it stood higher than Egypt’s 1.5 percent, Ghana’s 4.4 percent but below Kenya’s 12.9 percent. Meanwhile, Organization for Economic Cooperation and Development (OECD) member countries averaged 53.3 percent in 2018.
Leadway Pensure was incorporated on the 25th of August, 2004 as a Pension Fund Administrator in accordance with the provisions of the Pension Reform Act 2004.
The PFA was formed by a consortium of three (3) major financial service companies, and is one of the most capitalized PFA’s in Nigeria with an authorized share capital of N2.0 Billion. Leadway’s shareholder’s fund is in excess of N4.0 billion.
OLUFIKAYO OWOEYE, SEGUN ADAMS & ISRAEL ODUBOLA
