Pension Assets Rise by 2.4% to N9.8bn


Obinna Chima

The total stock of pension assets increased by N228 billion to N9.811 trillion as at October 31, 2019, up from the N9.583 trillion it was in September, data from National Pension Commission (PenCom) have shown.

This showed that the pension fund assets increased by 2.4 per cent in the one month under review.
PenCom, in its monthly report for October, attributed the accretion in pension funds within a month to the positive returns on the classes of investments the funds were invested in as well as an increase in enrolment into the contributory pension scheme.

A breakdown of the figure showed that a significant chunk of the pension assets is invested in FGN Securities, with a total of N6.910 trillion (70.43 per cent). Of this amount, 47 per cent (N4.578 trillion) of the investment was placed on FGN Bonds.

This was closely followed by treasury bills with 22 per cent (N2.23 trillion); investment in local money market securities, which was 11.73 per cent (N1.150 trillion) and total amount placed by the Pension Fund Administrators (PFAs) in banks stood at N1.053 trillion (11.73 per cent).

Also, the report showed that Pension Fund Administrators allocated 4.85 per cent (N476 billion) of their investment to domestic ordinary shares; N66.985 billion (0.68 per cent) on foreign ordinary shares; agency bonds (NMRC and FMBN) got 0.06 per cent (N5.40 billion) and they staked 0.72 per cent (N71.131bn) on Sukuk Bond.

The monthly summary of pension fund assets showed that in the period under review, the PFAs also invested 1.30 per cent (N127bn) of their funds in State Government Securities; N596 billion (6.08%) on Corporate Bonds; N97.859 billion (one per cent) on Commercial Papers; N11.874 billion (0.12 per cent) on Real Estate Investment Trusts; and N244 billion (2.48 per cent) on real estate properties.

In addition, the data revealed that the PFAs, in the period under review, also staked N32.568 billion (0.33 per cent) on private equity funds; N95 billion (0.97 per cent) on infrastructure funds.
PenCom recently stated that it was striving to capture the remaining 90 million Nigeria’s working population into the pension scheme.

PenCom Acting Director General, Aisha Dahiru Umar, had said out of the 90 million people excluded from the scheme, her agency was planning to capture about 17 million that are self-employed and engaged in small businesses through the micro pension scheme.

However, she had said about 70 per cent of the working population had no bank accounts, let alone pension scheme because of lack of means of identification and poor financial behaviours.
She stated that the above growth justified the commission’s emphasis on the safety of pension funds as the bedrock of sustaining the CPS and assured all stakeholders that the pension reform remains steadily on course.

According to her, the modest milestones notwithstanding, the commission and pension operators are committed to actualising the growth potentials of the pension industry.
She described the commission’s current strategic focus, which aims to expand access to pension via the CPS, as a veritable tool for economic development.

“This aligns with the pension reform objective of old age poverty reduction and improvement in the welfare and general standard of living. The quest to expand coverage of pension is being pursued through some transformational initiatives, especially the Micro Pension Plan,” she added.