Analysis of available data and information conducted by Quantitative Financial Analytics indicates that more Nigerians are saving for retirement. Data from the National Bureau of Statistics showed that 7,975,976 people of different ages enrolled into various pension funds in March, 2018.
However, similar but recently released data for April, shows that 8,027,428 people were in the enrollment of pension funds. This represents an additional 51,452 people that enrolled in April. Of this number, 14,660 came from Nigerians aged between 40 and 49 years while 10,999 of those aged 50 to 59 registered anew. About that same number, 10,853 of additional registrants in the age bracket 30 to 39 is indicated to have registered, according to the report.
Surprisingly, only 5,057 additional members aged less than 30 was noticed while those in the age brackets of 60 to 65, and 65 and above only added 6,000 and 3,874 new members. This trend either indicates that the age bracket of 30 to 59 are more concerned about saving for retirement or that most of those less than 30 years of age are not in the labour market or not yet saving for retirement. But it will be instructive to note that the earlier one begins to save for retirement, the more one is bound to accumulate on retirement. Gender analysis indicates that 70% of the additional enrollees are male while 30% are female which is also the male-female ratio on a total basis.
Coincidentally, the rate of change in the number of people enrolled in the various pension savings programs is almost the same as the rate at which the value of pension assets changes. As at the end of March, 2018, total pension funds assets stood at N7,943,508 but that increased by 1.93% to N8,096,733 by the end of April, 2018. The increase in assets came with asset reallocation as fund managers moved their assets around in search of additional returns. Fund managers divested marginally from Treasury Bills and Corporate Bonds into FGN bonds by increasing allocation to FGN Bonds by about 4% while decreasing allocation to Treasury bills and Corporate Bonds by 2% and 9% respectively. The divestment from Corporate Bonds took place within the controlled pension fund administrators, CPFAs group while the divestment from Treasury bills happened in the Retirement Savings Account, RSA type of pension funds.
FGN Bonds still remain the largest asset class with 49.3% allocation, followed by allocation of 20% to Treasury Bills. In the same way, RSA type of funds remains the largest with 68% followed by CPFAs’ 13% as at the end of April.
Pension fund assets in Nigeria have witnessed some heartwarming growth from both investment performance and additional contributions, though in relation to the GDP, it is still one of the smallest globally, it is hoped that the growth will continue and sooner or later, Nigerians will become increasingly more aware of the need for and benefits of retirement savings.