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Funds Management

Pension Fund Administrators in Nigeria and their scorecard

All PFAs for Fund I, II, III, and IV recorded positive returns for the period despite COVID-19 pandemic.

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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

Despite the disruptions caused by the COVID-19 pandemic, which affected most aspects of the Nigerian economy, Pension Fund Administrators (PFAs) in Nigeria performed satisfactorily, as they recorded positive returns between January and August 2020.

According to the report from Pension Nigeria, no PFA had negative returns on investment (ROI) during the period under review, indicating that all PFAs for Fund I, II, III, and IV recorded positive returns.

This is quite impressive, given that the pandemic had impacted most aspects of the Nigerian economy negatively, causing a 1.95% (year-to-date) decline of the NSE’s All Share index, while the country’s Gross Domestic Product (GDP) contracted by 6.1% in the second quarter of 2020.

READ: Nigeria’s pension fund assets increase to N8.14 trillion

Industry average Return on Investment (ROI)

  • Fund I industry with 20 PFAs, recorded an average of 8.14% returns between January and August 2020.
  • Fund II industry has 22 PFAs, and recorded an average return of 9.33%.
  • Fund III recorded an industry average returns of 10.37%, with 22 PFAs.
  • While Fund IV with 22 PFAs, recorded 9.01% return on investment.

It is worth noting that no single PFA was dominant in all the four funds. NLPC PFA Limited and Investment One Pension Managers Limited, however, had dominance in three funds.

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(Read Also: How foreign exchange risks and others affect the Nigerian pension industry)

Veritas Glanvills pensions Limited, Fidelity Pension Managers Limited, and IEI-Anchor Pension Managers Limited topped the list in two funds. Radix Pension Fund Managers Limited, Stanbic IBTC Pension Managers Limited, Sigma Pensions Limited, OAK Pensions Limited, AXA Mansard Pension Managers Limited, NPF Pensions Limited, Crusader Sterling Pensions Limited, and Nigerian University Pension Management Limited dominated the list in one fund.

How the PFAs performed in each of the Funds 

  • Fund I – Veritas Glanvills Pensions Limited topped the list in average return on investment on Fund I with 21.11%, followed by Stanbic IBTC Pension Managers 12.33%, Sigma Pensions Limited 11.95%, OAK Pensions Limited 11.59%, and IEI-Anchor Pension Managers 9.88%.
  • Fund II – NLPC Pension Fund Administrators Limited led the pack with an average return on investment of 24.32%, followed by IEI-Anchor Pension Managers Limited 11.59%, Crusader Sterling Pensions Limited 10.74%, Investment One Pension Managers Limited 10.65%, and Nigerian University Pensions Limited 10.25%
  • Fund III – NLPC Pension Fund Administrators Limited dominated the top 5 list with 24.84%, followed by Investment One Pension Managers Limited 17.58%, Radix Pension Fund Managers 14.78%, Fidelity Pension Managers Limited 12.45%, and AXA Mansard Pensions Limited 11.46%.
  • Fund IV – NLPC Pension fund Administrators Limited maintained the lead in the top 5 PFAs with 23.59%, followed by Investment One Pension Managers Limited with 15.28%, Fidelity Pension Managers Limited with 12.3%, NPF Pensions Limited with 10.98%, and Veritas Glanvills Pensions Limited with 9.74%.

How all the PFAs performed in all the Fund categories 

12 out of the 22 PFAs performed above the average ROI of 9.28%, for all the funds put together. NLPC Pension Fund Administrators Limited topped the list (20.33%), followed by Investment One Pension Managers Limited (14.5%), Veritas Glanvills Pensions limited (12.02%), AXA Mansard Pensions (10%), OAK Pensions Limited (9.7%).

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(Read Also: How foreign exchange risks and others affect the Nigerian pension industry)

Others include Leadway Pensure PFA Limited (9.67%), Crusader Sterling Pensions Limited (9.65%), AIICO Pension Managers (9.61%), IEI-Anchor Pension Managers Limited (9.51%), Fidelity Pension Managers (9.46%), Stanbic IBTC Pension Managers (9.45%), and Radix Pension Fund Managers Limited (9.28%).

Meanwhile, 10 PFAs performed below the average ROI, with Premium Pensions Limited (4.96%) at the bottom of the list, followed by APT Pension Fund Managers (5.81%), First Guarantee Pensions Limited (6.46%), TrustFund Pensions Plc (6.61%), ARM Pension managers (7.0%).

Other Administrators that made the list includes, Nigeria University Pension Management Co. Limited (7.23%), Pension Alliance Limited (7.40%), FCMB Pensions Limited (7.60%), Sigma Pensions (8.86%), NPF Pensions Limited (8.95%).

READ ALSO: Pension fund administrators pile up cash in anticipation of withdrawals

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About PFAs

In Nigeria, the requirement for the Contributory Pension Scheme is that the pension funds are to be privately and exclusively managed by licensed Pension Fund Administrators (PFA). The main functions of the PFAs are to open Retirement Savings Accounts (RSA) for employees, invest and manage pension fund assets, payment of retirement benefits, and accounting for all transactions relating to the pension funds under their management.

Currently, there are twenty-two (22) PFAs in Nigeria with a total asset value in excess of N11 trillion as of date.

(Read Also: Lagos approves 33% increase for all state pensioners)

Effective from 2nd July 2018, the MultiFund Structure for Retirement Savings Accounts (RSA) was required to be implemented across all the PFAs in Nigeria. The Multi-Fund structure is a framework that aims to align the age and risk profile of RSA holders, by dividing the RSA Fund into four distinct fund categories;

  • RSA FUND I: Retirement Savings Account Fund I (An Active Contributor who is below 50 years of age, and chooses for his contribution to be invested in this fund).
  • RSA FUND II: Retirement Savings Account Fund II (default fund for all Active Contributors, who are below 50 years of age)
  • RSA FUND III: Retirement Savings Account Fund III (default fund for all Active Contributors, who are 50 years and above)
  • RSA FUND IV: Retirement Savings Account Fund IV (Fund for Retirees only)

Inter-Fund Movement 

In implementing the Multifund framework, the Pension Commission allows Retirement Savings Account (RSA) holders to move from one fund category to another.

  • Fund I – It is a special but optional fund category that RSA holders who are below 50 years of age can request to be moved to. It has the highest exposure to the stock market amongst all the funds under the multifund structure, as a higher percentage of the fund is usually invested in buying shares of companies, compared to other fund categories.
  • Fund II – It is the default fund under the multifund framework for RSA holders who are below 50 years of age. Most RSA holders fall under this category. It is quite necessary to consciously monitor the performance of Fund I to assist in making decisions, whether to move to fund I or remain in the fund category.
  • Fund III – It is the default fund for RSA holders who are 50 years of age and above, but are still active in the employment service. The multifund structure permits the PFAs to move anybody who is 50 years and above from Fund II to fund III. The law allows the RSA holders to request to be moved back to fund II if she/he so desires. If the RSA holder is 50 years and above and has not requested to be moved back to fund II, he/she will be automatically moved in Fund III. It is imperative the RSA holder monitors the performance of Funds III and II, as to be able to decide whether to remain in fund III or migrate to fund II.
  • Fund IV – It is otherwise known as the Retiree fund. All the RSA holders who are retired from active service are automatically moved to fund IV category, and the retirees are not permitted to move to any other fund categories.

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Funds Management

PenCom okays N2.58billion for relatives of 591 deceased workers in three months

PenCom has released N2.58billion for payment of pension benefits of deceased workers.

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Pencom, pension, Nigeria’s Pension Asset increased by N228 billion in October, PFAs increase investment in infrastructure to N40.52 billion   

The National Pension Commission  (PenCom) has released N2.58billion for payment of pension benefits of 591 deceased workers under the Contributory Pension Scheme in the second quarter 2020.

This was disclosed in the commission’s second-quarter 2020 report.

READ: PenCom should pay 50% of workers’ pension at retirement – TUC

According to the report, the beneficiaries included 288 from the Federal Government sector, 135 from State Government sector and 168 from the private sector, making a total of 591 relatives.

It read, “The commission approved the payment of N2.58bn as death benefits to the beneficiaries of the 591 deceased employees during the quarter under review.”

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READ: PenCom recovers N17.51billion from defaulting employers, imposes penalties

PenCom also said that during the quarter under review, the Pension Fund Administrators recaptured 56,990 Retirement Savings Account holders and uploaded their data on the Enhanced Contributory Registration System.

It stated that the Enhanced Contributor Registration System, which was deployed in June 2019, had provided a platform for addressing various issues identified with the Contributor Registration System.

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READ: How foreign exchange risks and others affect the Nigerian pension industry 

It said the PFAs under the assistance of Pension Operators Association had commenced the implementation of a shared service approach in order to speed up the data recapture exercise.

The commission said it generated a total number of 190 employer codes in the period under review using the ECRS.

READ: FUGAZ Banks suffer N1.9 trillion in CRR Debits in Q2

Over 92% of employer codes generated were for private sector companies, including about seven per cent for small businesses, it stated.

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Funds Management

Best performing Mutual Funds in September 

Nairametrics reviews the best Mutual Funds in August, judging by their performance.

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Best Mutual Funds in Nigeria

Mutual Funds are professionally managed investment schemes that are controlled by designated Asset Management Companies (AMC). These Funds allow investors the opportunity to invest in stocks, bonds, and securities. They are particularly good for passive investors.

According to data from the Security and Exchange Commission (SEC), Nigeria currently has about 112 Mutual Funds as of October 2nd, 2020. These Mutual Funds cut across several Fund Types. Here is a breakdown of the Fund Types available for investors according to SEC.

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These are the top 5 performing funds. We also included profiles of the Funds as described on their websites. To determine the best performing Funds in the month of September, we looked at the Fund Prices as of August 2020 and compared to the fund prices as of 2nd October, as released by the Securities and Exchange Commission (SEC).


Vantage Balanced Fund – Investment One Funds Management Limited

The Vantage Balanced Fund (VBF), formerly known as Nigerian International Growth Fund is a balanced Mutual Fund, was created to maximize long-term capital growth and maintain regular income distribution.

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The Fund is invested in Equities, Fixed Income and Money Market Instruments, and Real Estate investments. The primary objective of the Fund is long-term capital appreciation, which is achieved by investing not more than 70% of the Fund’s assets in the equities of blue-chip companies listed on the Nigerian Stock Exchange.

August 28th 

Fund Price – N2.17

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October 2nd

Fund Price – N2.41

Return – 11.06%

Ranking – First

 

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Commentary: VBF is a Mixed Fund by Investment One Funds Management Limited. It is the best performing fund in the month of September, growing by 11.06%. The net asset value stood at N1.71 billion as of 2nd October.

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Anchoria Equity Fund – Anchoria Asset Management Limited

The Anchoria Equity Fund is an open-ended fund. It is a collective investment scheme, which seeks to invest primarily in quoted equities (minimum of 75%) and fixed income securities (maximum of 25%). The Fund does not invest in unquoted equity securities. The Fund employs an asset mix strategy with the aim of achieving consistent growth, by seeking significant exposure to a diversified pool of investment-grade equities and fixed income securities.

In order to ensure sound investment selection, portfolio, and risk management practices, the Fund adopts a portfolio strategy that largely depends on fundamental and technical analysis in order to properly assess the inherent risks within the context of the Fund profile. Accordingly, the Fund holds long term quoted equity positions with strong fundamentals underpinned by good economic themes, that are attractively priced relative to their true value and prospects.

August 28th 

Fund Price – N99.33

October 2nd 

Fund Price – N107.87

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Return – 8.60%

Ranking – Second

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Commentary: This is an Equity Based Fund by Anchoria Asset Management Limited. For a fund that is predominantly focused on equities, this is a pretty much impressive performance by all standards. It grew by 8.60% in the month of September. The net asset value stood at N313.78 million as of 2nd October.


Paramount Equity Fund – Chapel Hill Denham Mgt. Limited

The Paramount Equity Fund is Nigeria’s oldest mutual fund which invests in a broad range of high-quality equities and fixed income securities. The Fund seeks to provide an investment vehicle that enables unitholders to achieve consistent capital appreciation and some income over the long term. The Fund is suitable for investors who seek high capital growth and have a high-risk appetite. Investors are also expected to have medium to long term investment horizon.

August 28th 

Fund Price – N11.54

October 2nd 

Fund Price – N12.52

Return – 8.49%

Ranking – Third

Commentary: This is an Equity Based Fund by Chapel Hill Denham Management Limited. The Fund grew by 8.49% in the month of September. The performance is impressive considering that it is predominantly focused on equities. The net asset value stood at N425.28 million as of 2nd October.  


VI ETF – Vetiva Fund Management Limited

The Vetiva Industrial ETF “VETIND ETF” is an open-ended Exchange Traded Fund managed by Vetiva Fund Managers Limited. The VETIND ETF is designed to track the performance of the constituent companies of the NSE Industrial Index and replicate the price and yield performance of the Index.
The NSE Industrial Index comprises of the top 10 companies in the Industrial sector listed on the Nigerian Stock Exchange (NSE), in terms of market capitalization and liquidity and is a price index weighted by adjusted market capitalization.

August 28th 

Fund Price – N11.19

October 2nd 

Fund Price – N12.00

Return – 7.24%

Ranking – Fourth

Commentary: The VI ETF by Vetiva Fund Management is the best performing Exchange Traded Fund in the month of September. It grew by 7.24% in the review month. The net asset value stood at N126.32 million as of 2nd October. 


VCG ETF – Vetiva Fund Managers

The Vetiva Consumer ETF “VETGOODS ETF” (launched in 2015), is an open-ended Exchange Traded Fund managed by Vetiva Fund Managers Limited. The VETGOODS ETF is designed to track the performance of the constituent companies of the NSE Consumer Goods Index and to replicate the price and yield performance of the Index.

The NSE Consumer Goods comprises the top 15 companies in the Food/Beverages and Tobacco sector listed on the Nigerian Stock Exchange (NSE), in terms of market capitalization and liquidity, and is a price Index weighted by adjusted market capitalization.

August 28th 

Fund Price – N4.27

October 2nd 

Fund Price – N4.57

Return – 7.03%

Ranking – Fifth

Commentary: This is another of Vetiva’s products, and it is one of the best Exchange Traded Funds based on September performance, growing by 7.03%. VCG EFT Funds are a great source of investment, and it is not surprising to see another in the top 5 rankings. The net asset value stood at N117.36 million as of 2nd October. 


Bubbling Under: The following Funds make up the rest of the top 10 on our list in descending order.

6.VG 30 ETF – Vetiva Fund Managers Limited (Exchange Traded Funds)

Return – 6.64%.

7. ACAP Canary Growth Fund – Alternative Cap. Partners Limited (Mixed Funds)

Return – 6.22%.

8.VETBANK ETF – Vetiva Fund Managers Limited (Exchange Traded Funds)

Return – 5.80%.

9. AIICO Balanced Fund – AIICO Capital Ltd (Mixed Funds)

Return – 5.75%.

10. Frontier Fund – SCM Capital Limited (Equity Based Funds)

Return – 5.34%.


NB: The figures are based on SEC weekly performance report 

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Depositors of Post Service Homes Savings and Loans Limited soon to be paid – NDIC

Depositors of Post Service Homes Savings and Loans Limited currently in liquidation will soon be paid their claims.

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NDIC

The Nigeria Deposit Insurance Corporation (NDIC), the official Liquidator of the defunct Post Service Homes Savings and Loans Limited (in-Liquidation) is in the process of paying insured sums to the depositors of the closed bank.

As from Monday, 5th October 2020, all depositors of the bank are requested to visit any branch of the defunct bank, for verification of their claims with the NDIC officials.

READ: NDIC set to pay insured depositors of liquidated Femaz Microfinance Bank

NDIC further directed the affected Depositors to present their cheque books, passbooks, and any other proof of account ownership, together with any valid means of identification; and alternate account as part of the verification exercise, before the insured amount can be paid to them.

All eligible depositors could also contact the representatives of the Director, Claims Resolution Department in any of the underlisted NDIC Zonal Offices nearest to them, to file their claims or seek further clarifications as may be deemed necessary.

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READ: CBN says Nigerian Youth Investment Fund is coming soon

NDIC Zonal offices and phone numbers:

S/N OFFICE ADDRESS TELEPHONE
1 Lagos Office NDIC NECOM House 10th Floor, 15 Marina, Lagos. 08166569995; 09072412332
2 Enugu 10, Our Lord’s Street Independence Layout, Enugu. 042-290898
3 Benin 28A/28B Benoni Hospital Road, Off Airport Road, GRA Benin City, Edo State 08150999577; 08150999588; 08150999599; 08150999600; 08150999535
4 Kano Plot 458 Muhammad Muhammad Street, Off Maiduguri Road, Hotoro GRA, Kano. 08097756130; 09092748222
5 Ilorin No 12A Sulu Gambari Road Ilorin. 08023123185
6 Bauchi Plot No 3 Bank Road, P.M.B 0207, Bauchi. 09-4601505
7 Sokoto No 2 Gusau Road, Opp. NNPC Mega Station, Sokoto. 08033155162
8 Yola No 6 Numan Road P.M.B. 2227, Jimeta Yola, Adamawa State. 08067910599; 08068418069; 08067923383; 09-4601515 09-4601516
9 Port Harcourt No 104 Woji Road, Off Olu Obasanjo Road, GRA, Port Harcourt 09090726737; 09029150752
10 Head Office Abuja Head, Bank Examination Unit (BEU) Abuja Plot 447/448 Constitution Avenue, Central Business District, Abuja. 09-4601260; 09-4601261

 

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