Nigeria’s pension funds industry recorded a significant growth of N349.25bn in January 2025, according to an unaudited report on the pension funds industry portfolio for the period ended 31 January 2025.
According to the report released by the National Pension Commission, the 1.54 per cent propelled the total net asset value of pension funds to N22.86tn by the end of the reporting period from N22.51tn as of December 2024.
Year-on-year, this is a N3.33tn or 17.05 per cent rise from N19.53tn as of January 2024.
The pension industry closed out the 2024 financial year with N22.512tn in net asset value and 10,582,299 in retirement savings accounts.
The report, covering approved existing schemes, closed pension fund administrators and retirement savings accounts, including unremitted contributions at the Central Bank of Nigeria and legacy funds, indicates a positive trajectory for the nation’s pension assets.
This growth is a combined result of the performance across various pension fund types, including existing schemes, CPFAs, and the different RSA funds (Fund I, Fund II, Fund III, Fund IV, Fund V, and Fund VI), as well as the Retiree Fund VI.
A closer look at the asset allocation reveals that domestic ordinary shares played a significant role in the investment portfolio. As of January 2025, the total value of domestic ordinary shares held by pension funds stood at N2.41tn. This considerable allocation suggests that investments in the local equities market remain a key component of pension fund strategies.
The report also provides a breakdown of asset classes and their values across the different fund types. For instance, total FGN securities held amounted to a substantial N14.31tn, comprising various federal government bonds and treasury bills. Other significant asset classes include money market instruments with a total value of N2.18tn and corporate debt securities at N2.27tn. Allocation to mutual funds increased to N93.22bn from N80.78bn in December 2024.
As of January 2025, the RSA Membership stood at 10,615,0281, highlighting the large number of contributors to the pension system.
The positive growth in the net asset value reflects the collective contributions and investment returns generated within the industry.
The January data indicates a strong start to the year for Nigeria’s pension fund industry, demonstrating its continued growth and significance in the nation’s financial landscape.
To boost the industry, PenCom has urged state governments to implement the Contributory Pension Scheme.
According to the pension industry regulator, only 11 states have commenced the implementation of the CPS as of December 2024. They are Lagos, Kaduna, Ekiti, Edo, Ondo, Delta, Benue, Anambra and Jigawa States, as well as the Federal Capital Territory.
“Setting the pace of sustainable pension administration, ensuring that retirees receive their entitlement promptly. The following states are yet to commence the implementation: Akwa Ibom, Borno, Kwara, Plateau, Cross River and Yobe. These states are encouraged to enact their CPS laws and commence implementation,” stated PenCom.
The Pension Reform Act of 2004 was a landmark piece of legislation that revolutionised pension administration in Nigeria by introducing the Contributory Pension Scheme. Under this law, employees and employers jointly contribute to a retirement savings account for each worker, making pensions more sustainable.