Pension assets rise by record N1.17trn in one month

Nigeria’s pension assets under Contributory Pension Scheme has risen by a record N1.17 trillion in one month.

Data released Tuesday by the National Pension Commission (PenCom) shows that the pension assets rose from N18.36 trillion in December 2023 to N19.53 trillion at the end of January 2024.

When compared to previous months, the increase in January is the biggest in years. The pension asset growth was N430 billion in December, N270 billion in November; N310 billion in October, and N60 billion in September.

The PenCom data further shows that the number of registered contributors increased to 10.23 million in January 2024 from 10.19 in December 2023.

Oguche Agudah, chief executive officer of Pension Fund Operators Association of Nigeria (PenOp), while explaining the cause of significant growth in pension funds in the last quarter of 2023, said: “In Q3:2023, monthly pension contributions for RSA Funds I, II, III, V, and VI Active reached a noteworthy total of N564.12 billion, marking a substantial increase of N69.91 billion (14.15 percent) compared to the N494.21 billion recorded in Q2:2023.”

Oguche said this surge in pension growth during the period can be attributed to various factors, primarily the increase in the salaries of many workers.

Recognising the challenges posed by the rising cost of living, many employers have responded by enhancing the compensation packages for their employees, and this salary increment has naturally led to higher monthly pension contributions, he said.

“Additionally, some states began clearing their outstanding pension arrears during this period. The resolution of these arrears likely prompted increased participation in pension schemes and contributed to the overall growth in contributions observed in Q3,” he said.

According to him, the salary increments and the proactive measures taken by certain states to address pension arrears have played a role in fostering the growth in pension contributions during the third quarter.

In terms of portfolio allocation, federal government securities sustained its lead with N12.14 trillion, with FGN bonds contributing N11.6 trillion.

Domestic ordinary shares attracted N1.93 trillion, while money market instruments got N1.71 trillion.