Pension assets surge by N541bn in October

…as total assets hit N21.9trn

Nigeria’s pension assets grew by N541 billion month-on-month reaching N21.92 trillion at the end of October 2024.

This growth highlights the continued resilience and stability of the nation’s pension sector, underscoring its importance as a key driver in long-term financial security for millions of Nigerians.

The National Pension Commission (PenCom) unaudited report on pension funds industry portfolio for the period ended 31 october 2024 shows that total pension assets grew to N21.92 trillion from N21.38 trillion in September.

The number of registered contributors also continue on the rise, hitting 10,535,608 in October, as against 10,498,055 in September 2024.

Industry analysts attribute the continued growth month-on-month to increase in the number of new registration into the Contributory Pension Scheme (CPS), as well returns on investment earned by the Pension Fund Administrators (PFAs).

The steady upward trajectory reflects a robust pension system that continues to attract new registrations as well as growth on return on investment, according to Michael Onah, an investment analyst with one of the PFAs.

In terms of asset allocation, FGN Securities continue to maintain the lead, recording N13.57 trillion in October, with FGN bonds taking N11.76 trillion, and treasury bill standing at N499.19 billion.

Domestic Ordinary shares took up N2.11 trillion in October, while money market got N2.20 trillion share of the total pension assets.

In second quarter (Q2) 2024, total contributions moved into individual RSA holders’ accounts stood at N 377 billion, with the public sector contributing N217 billion. The private sector contributed N160.83 billion, according to PenCom data compiled by analysts at the Pension Fund Operators Association of Nigeria (PenOp).

In the second quarter (Q2) of 2023, public sector contributions were higher at N286.69 billion, while the private sector contributed N234.47 billion, showcasing strong performance from both sectors. By contrast, in Q2 2022, the public sector contributed N136 billion, and the private sector, N101.96 billion, showing a steady but more modest increase in contributions.

Looking back at Q2 2021, both sectors contributed almost equally, with N97.17 billion from the public sector and N97.91 billion from the private sector.

Read also: Pension assets take slight cut on stocks’ performance in Q2

This marked a year where the gap between sectors was minimal, signalling balanced pension remittances. In Q2 2020, the public sector contributed N118.50 billion, while the private sector’s contribution was lower at N70.69 billion, PenOp said.

Overall, the public sector has generally led in pension contributions over the years, but the private sector has been catching up steadily, especially since Q2 2021, where it nearly matched and sometimes exceeded public sector contributions.

This growth suggests improved compliance, increasing employer participation, and growing awareness of pension obligations in both sectors. However, if more states were to join the Contributory Pension Scheme (CPS), these numbers could improve even further.

Increased participation from states would lead to greater compliance, a broader base of contributors, and ultimately, a more robust pension system that could drive higher remittances and financial security for retirees across the country, analysts say.