Nigeria’s pension industry recorded an impressive growth of N4.16 trillion in 2024, pushing total pension assets to a historic high of N22.51 trillion from N18.36 trillion in the previous year.
This increase marks a 22.65% year-on-year increase, according to the unaudited pension fund portfolio report released by the National Pension Commission (PenCom).
In addition to the asset growth, the total number of Retirement Savings Account (RSA) registrations reached 10.58 million by the end of December 2024, representing a 3.84% increase, equivalent to 390,899 new registrants within the year.
Fixed income allocation: Fixed income instruments maintained a dominant position in pension fund allocations, with investments totaling N18.85tn, accounting for 83.72% of the entire portfolio. The preference for fixed income securities is driven by their tax-exempt status and lower risk profile. Pension Fund Administrators (PFAs) particularly favored federal government securities due to their relative safety.
Meanwhile, investments in commercial paper, a money market instrument, recorded a sharp decline of 38.67% to N161.16 billion from N262.79 billion in 2023. The drop followed the suspension of commercial paper investments in October 2024 due to unclear regulations for non-bank capital market operators.
Equities allocation: Total investments in equities stood at N2.66 trillion, representing 11.81% of total pension assets in 2024. This includes allocations to foreign equities under Closed Pension Funds Administrators (CPFAs), which were allowed to continue operations following the introduction of the Contributory Pension Scheme (CPS) in 2004.
Other investment allocation: Pension fund administrators diversified their portfolio to mitigate risks, making allocations in mutual funds, infrastructure, and real estate.
PenCom lifted its suspension on commercial paper investments by Licensed Pension Fund Administrators (LPFAs) where non-bank capital market operators act as Issuing and Paying Agents (IPAs). This follows regulatory interventions by the Securities and Exchange Commission (SEC) to address concerns.
Effective from February 1, 2025, PenCom has mandated the use of Bank Verification Numbers (BVN) for RSA registration and data recapture. This move aims to enhance security and integrity within the pension database.
Omolola Oloworaran was appointed as acting Director-General in 2024, in line with Section 26 (1) of the Pension Reform Act 2014. Despite assuming office without Senate confirmation, Oloworaran has committed to sustaining pension asset growth, expanding CPS membership, and promoting coverage initiatives.