Pension assets add N385bn in May PFAs deepen investment in government securities

Nigeria’s pension fund assets rose by N384.98 billion in May 2026 to N31.32 trillion, extending the industry’s steady growth as investment gains across fixed-income securities and equities outweighed macroeconomic headwinds.

The latest unaudited pension industry portfolio released by the National Pension Commission (PenCom) showed that total net asset value climbed from N30.94 trillion in April to N31.32 trillion in May, representing a 1.24 percent month-on-month increase.

The growth reflects continued appreciation in the investment portfolios of Retirement Savings Account (RSA) funds and legacy pension schemes, reinforcing the industry’s position as one of Nigeria’s largest institutional investors.

The increase was broad-based across virtually all pension fund categories, with Fund IV, which caters primarily to retirees and older contributors with lower risk appetite, recording the largest absolute gain. Its assets expanded by N116.57 billion to N13.48 trillion, accounting for the biggest contribution to the industry’s overall monthly growth.

Fund V followed with an increase of N85.42 billion to N7.90 trillion, while Existing Schemes added N26.03 billion to close at N3.55 trillion. Fund III grew by N25.81 billion to N645.30 billion, Fund VI rose by N21.05 billion to N2.39 trillion, and Fund II increased by N16.29 billion to N2.78 trillion. On a percentage basis, Fund VI recorded the fastest growth during the month, reflecting stronger portfolio appreciation.

The latest figures confirms the conservative investment strategy adopted by pension fund administrators, with government securities continuing to dominate asset allocation. Investments in Federal Government securities rose to N17.48 trillion, representing nearly 56 percent of the industry’s total assets.

The holdings comprised N13.48 trillion in Federal Government bonds held to maturity, N2.75 trillion in available-for-sale Federal Government bonds, N1.13 trillion in Treasury Bills, alongside smaller exposures to Sukuk bonds, Green Bonds and Nigeria Mortgage Refinance Company (NMRC) agency bonds.

The dominance of sovereign debt highlights pension fund managers’ continued preference for highly rated, low-risk instruments that offer capital preservation and stable long-term returns while meeting regulatory investment guidelines.

Equities remained the second-largest asset class in pension portfolios despite market volatility. Domestic listed equities accounted for N6.47 trillion, while foreign equities stood at N282.76 billion, bringing total equity investments to approximately N6.76 trillion, or about 22 percent of total pension assets. The sizeable allocation underscores fund managers’ continued confidence in equities as a source of long-term capital appreciation and portfolio diversification.

Fixed-income instruments outside government securities also maintained a significant share of pension assets. Investments in corporate debt securities stood at N2.26 trillion, while money market instruments amounted to N3.02 trillion. Of the money market investments, N2.75 trillion was held in fixed deposits and bank acceptances, N225.16 billion in commercial papers and N43.54 billion in foreign money market instruments, reflecting the industry’s emphasis on liquidity management and income generation.

Alternative investments continued to expand gradually as pension fund administrators diversified portfolios into long-term productive assets. Infrastructure funds accounted for N317.60 billion, mutual funds N271.13 billion, private equity N258.34 billion, real estate N167.30 billion, Real Estate Investment Trusts (REITs) N113.83 billion and supranational bonds N31.25 billion.

Although these investments still represent a relatively small proportion of total pension assets, they signal a gradual shift towards financing infrastructure, private capital and other sectors capable of supporting long-term economic growth while enhancing portfolio returns.

The report also showed that participation in the Contributory Pension Scheme continued to expand, with the number of Retirement Savings Account holders rising to 11.27 million as of May 2026. The steady increase in contributors, combined with sustained asset growth, further strengthens the pension industry’s role as a major source of long-term domestic capital for Nigeria’s financial markets and economic development.