Nairametrics
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
  • Markets
    • Cryptos
    • Commodities
    • Equities
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Industries
    • Company News
    • Consumer Goods
    • Content Partners
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Tech News
  • Economy
    • Get Data
    • Macro-Economic News
    • Research Analysis
  • Business News
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
No Result
View All Result
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
  • Markets
    • Cryptos
    • Commodities
    • Equities
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Industries
    • Company News
    • Consumer Goods
    • Content Partners
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Tech News
  • Economy
    • Get Data
    • Macro-Economic News
    • Research Analysis
  • Business News
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
No Result
View All Result
Nairametrics
No Result
View All Result
Home Business News Coronavirus

How COVID-19 and low yield affect Nigeria’s pension funds

Uche Ndimele by Uche Ndimele
June 2, 2020
in Coronavirus, Opinions, Securities
PFA, Pension Fund Administrators in Nigeria and their scorecard, How COVID-19 and Low Yield Affect Nigeria’s Pension Funds, How COVID-19 and Low Yield Affect Nigeria’s Pension Funds
Share on FacebookShare on TwitterShare on Linkedin

Towards the end of 2019 it became evident, judging by the way interest rates were going, that pension fund managers might find it difficult to replicate prior years’ performances.

It even became more evident, when viewed against the realization that most of the assets under management by pension fund managers in Nigeria are invested in financial instruments that derive their benefits or even existence from the yield curve.

RelatedPosts

By the numbers: Comparing NNPC with Saudi Aramco

Two decisions Buhari needs to make to rescue his legacy on the Nigerian economy

As if that was not enough challenge, and to add insult to injury, out of nowhere and without any notice, came coronavirus. Today, those two, Covid-19 and low yield are conniving to rub pension fund managers of a chest-beating performance and the pension fund investors of their hope for a long-lasting and blissful retirement.

Already, the impacts of those two are being felt by pension funds, not only in Nigeria but the world over. My pension fund account is yet to recover from the 18% drop it suffered in March 2020.  Although Nigerian pension funds recorded positive returns during the first 4 months of the year, such returns are nothing to write home about, when compared to prior years’ returns.

According to an analysis conducted by Quantitative Financial Analytics, the RSA category of Nigerian pension funds generated an average of 1.64% on a year to date basis, as at April 30th, 2020, while the Retiree fund category generated an average return of 2.96%. Compared to a similar period in 2019, RSA funds generated an average return of 3.46% while the Retire fund category had an average of 4.13%. For the year to date, April 30th, 2020, Pension fund manager, Veritas Glanvills (VG) recorded the highest return in both categories of 4.24% and 5.38% respectively and a couple of funds made losses.

READ MORE: Nigerian Pension Funds Continue to Gather Positive performance, though in Trickles

The grass is not greener on the other side

Although those numbers are not what pension fund investors expected or hoped for, they are quite impressive when compared with what is happening elsewhere in the World. According to the Financial Times Adviser (FT Adviser), “the average pension fund fell by 15% in the first quarter of this year” in the UK, which represents “the worst quarterly performance on record”. In the United States of America, the story is the same. According to the Washington Post which described COVID-19 pandemic as a meltdown, “This meltdown has exposed the fragility of public pension systems in the United States”. In the wake of the pandemic, “Moody’s Investors Service estimated that the stock market sell-off vaporized $1 trillion of value from public pension portfolios or about 21 percent of the assets that pay for the retirement plans of state and local employees”.

In another reportorial, the NJ Spotlight, (a New Jersey Newsletter in the US), noted on March 26th, 2020, that Covid-19 hammered public pension workers to the extent that the pension system shed $6 billion since January 1st. S&P Ratings also estimated that, in the first quarter of 2020, “U.S. public pension funds in aggregate lost a cool $855 billion”.

Those underscore the bleak future facing pension fund industries all over the World and the need for Nigerian pension fund investors to be thankful with the 1% average gain that Nigerian pension fund managers were able to generate.  It is hoped that as the fight to curb or eradicate Covid-19 rages on successfully, that the performance will improve rather than get eroded.

(READ MORE: Analysis: Your pension fund is worth less)

Pension funds,How COVID-19 and Low Yield Affect Nigeria’s Pension Funds
Pension funds

With that said, here are the 5 best pension fund performers in Nigeria as at April 30th 2020:

Retirement Savings Account, RSA, category:

Best Performing Fund: 

Name of Fund: Veritas Glanvills Pensions RSA Pension Fund 2

YTD Performance %:  4.24%

YTD Gain per unit:  N0.13

READ ALSO: Sukuk is ‘new love’ for Pension funds as total asset value hit N7.9 trillion

Second Best Performing Fund: 

Name of Fund: AIICO Pensions RSA fund 2

YTD Performance %:  3.75%

YTD Gain per unit:  N0.14

3rd Best Performing Fund: 

Name of Fund: OAK Pensions RSA Fund 2

YTD Performance %:  3.31%

YTD Gain per unit:  N0.10

4th Best Performing Fund: 

Name of Fund: Premium Pensions RSA Fund 2

YTD Performance %:  2.89%

YTD Gain per unit:  N0.14

5th Best Performing Fund: 

Name of Fund: Anchor Pensions RSA Fund 2

YTD Performance %:  2.69%

YTD Gain per unit:  N0.07

(READ MORE:Is the pension asset just another cookie jar?)

PENCOM, Pension Funds, Analysis: Your pension fund is worth less, PenCom dissolves interim management committee for First Guarantee Pension, appoints new board, How COVID-19 and Low Yield Affect Nigeria’s Pension Funds

Retirement Savings Account, RSA, category

Best Performing Fund: 

Name of Fund:  Veritas Glanvills Pension Retiree Fund 4

YTD Performance %:  5.38%

YTD Gain per unit:  N0.19

Second Best Performing Fund: 

Name of Fund: Radix Pensions Retiree fund 4

YTD Performance %:  5.17%

YTD Gain per unit:  N0.11

3rd Best Performing Fund: 

Name of Fund: Fidelity Pensions Retiree Fund 4

YTD Performance %:  4.27%

YTD Gain per unit:  N0.14

4th Best Performing Fund: 

Name of Fund: ARM Pensions Retiree Fund 4

YTD Performance %:  4.21%

YTD Gain per unit:  N0.16

5th Best Performing Fund: 

Name of Fund: OAK Pensions Retiree Fund 4

YTD Performance %:  3.94%

YTD Gain per unit:  N0.15


CSL Stockbrokers Limited, Lagos (CSLS) is a wholly-owned subsidiary of FCMB Group Plc and is regulated by the Securities and Exchange Commission, Nigeria. CSLS is a member of the Nigerian Stock Exchange.

Related

Tags: Business NewsCovid-19Low YieldsNigeria NewsPension FundRetirement Savings Account RSA

Comments 1

  1. Anonymous says:
    June 9, 2020 at 4:06 pm

    That’s bad

    Reply

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Hot forex
Cornerstone
Mega Millions
Polaris Bank
Access Bank
Bankers Committee
First bank


FCMB
Ikeja Electrics




    Business News | Stock Market | Money Market | Cryptos | Financial Literacy | SME |

    Recent News

    • Davido discusses raising over N200 million for charity on The Daily Show
    • You can apply to these Universities in the US and in the UK without IELTS
    • Sujimoto is giving away a 3 bedroom fully furnished apartment in Lekki-Lagos on July 1st 2022 for free.

    Follow us on social media:

    Recent News

    Davido discusses raising over N200 million for charity on The Daily Show

    Davido discusses raising over N200 million for charity on The Daily Show

    June 27, 2022
    You can apply to these Universities in the US and in the UK without IELTS

    You can apply to these Universities in the US and in the UK without IELTS

    June 27, 2022
    • ABOUT US
    • CONTACT US
    • PRODUCTS
    • ANDROID APP
    • iOS APP
    • DISCLAIMER
    • CAREERS
    • PRIVACY POLICY

    © 2022 Nairametrics

    No Result
    View All Result
    • Home
    • Exclusives
      • Financial Analysis
      • Corporate Stories
      • Interviews
      • Investigations
      • Metrics
    • Markets
      • Cryptos
      • Commodities
      • Equities
        • Dividends
        • Stock Market
      • Fixed Income
      • Market Views
      • Securities
    • Industries
      • Company News
      • Consumer Goods
      • Content Partners
      • Corporate deals
      • Corporate Press Releases
      • Energy
      • Entertainment
      • Financial Services
      • Hospitality & Travel
      • Manufacturing
      • Real Estate and Construction
      • Tech News
    • Economy
      • Get Data
      • Macro-Economic News
      • Research Analysis
    • Business News
    • Financial Literacy
      • Career tips
      • Personal Finance
    • Lifestyle
      • Billionaire Watch
      • Profiles
    • Opinions
      • Blurb
      • Op-Eds

    © 2022 Nairametrics

    Social Media Auto Publish Powered By : XYZScripts.com