Nigeria’s pension asset under management, as of December 2020, stands at N12.3trillion which represents a modest growth of 20% year-on-year and 0.003% month-on-month (no significant change), according to the monthly report by National Pension Commission (Pencom).
According to the report, total RSA funds increased by 20% year-on-year while the funds under both existing schemes and Closed Pension Fund Administrator (CPFA) as well, grew by 21% year-on-year.
Other Key highlights
- As of December 2019, investments in FGN Securities accounted for 72% of the total pensions assets fund, out of which 73% was invested in Bonds and 26% in Treasury Bills.
- As of December 2020, investments in FGN Securities accounted for 66% of the total pensions assets fund, out of which 84% was invested in Bonds and a paltry 8% in Treasury Bills, which is not unrelated to the subsisting very low yield of TB in the money market.
- The investments in FG Bonds represent 56% of the total pension assets fund under management. The renewed and increased investments in FG Bonds can be attributed to the attractiveness of the yields of FG bonds over the Treasury Bills.
- RSA Fund II and III accounted for 89% of the total RSA funds and 69% of the total pension assets under management as of December 2020, while others – Funds I, IV and V accounted for 31%
- All the RSA funds, including existing scheme and CPFA recorded year-on-year growth as follows: Existing scheme (13%), CPFA(28%), Fund I (49%), Fund II(19%), Fund III(21%), Fund IV(18%).
- As of December 2020, only N80.54million was invested under the newest RSA fund (Fund V) – specifically created for micro pensions.
What you should know
There are 4 pension fund types, with the newest recently introduced for the micro pension scheme.
The Multi-Fund structure is a framework that aims to align the age and risk profile of RSA holders, as follows:
- Fund I – This is an optional fund. Contributors must write formally to opt for this Fund.
- Fund II – This is the default fund for contributors aged 49 and below.
- Fund III – This is the default fund for contributors aged 50 and above.
- Fund IV – This is the Retiree Fund.