Pension Fund Administrators in Nigeria posted impressive returns in the year 2020, despite the disruptions caused by the covid-19 pandemic, in which most economic activities were put on hold.
Since the launch of the RSA transfer window in November 2020, the competition amongst Nigerian Pension Administrators has increased as contributors can now easily switch from one PFA to another. In less than two months of the launch, over 6,000 RSA contributors applied to switch managers between November and December 2020.
According to data obtained from Pension Nigeria, all 22 listed Pension Fund Administrators recorded positive growth during the period under review, quite remarkable considering the country fell into recession in 2020 and could only manage to slightly recover in the last quarter.
A cursory analysis showed that the Nigerian stock market printed remarkable returns in the year, with a 50% increase in the All-share index and a 31.74% increase in the NSE Pension index.
Industry average Return on Investment
- Fund I with 20 PFAs, recorded an average growth of 21.72% in 2020.
- Fund II with a total of 22 PFAs recorded an average growth of 20.12% in the review year.
- Fund III recorded an average return of 19.6%, with a total of 22 administrators.
- Fund IV grew by 15.96% on average with 22 fund administrators.
How the PFAs performed in each fund
Although no Fund Manager dominated the list in all categories, NLPC Pension led the list in Fund II, III, and IV, with 39.27%, 39.88%, 36.23% yield on investment respectively, while Investment One and AXA Mansard also represented themselves on the three occasions.
- RSA Fund I – Stanbic IBTC led the list with 38.9% returns on investment, closely followed by OAK Pensions limited and Veritas Glanvills with 38.45% and 38.16% respectively. Trustfund Pensions also recorded a 33.87% gain, while Crusader Sterling Pensions printed 29.49% returns.
- RSA Fund II – NLPC led this category with 39.27% returns, Crusader Sterling Pensions recorded a 29.3% gain during the period. IEL-Anchor Pension Managers grew its investments 25.32%, AXA Mansard Pension by 23.9% while Investment One Pension Managers followed closely with a 23.8% yield on investment.
- RSA Fund III – NLPC also led this category of RSA fund with 39.88% gain followed by AXA Mansard Pension, which posted a 31.15% gain in the review period. Investment One Pension Manager grew its contributors’ funds by 29.87%, Radix Pension Fund Manager grew by 27.58% while Fidelity Pension Managers rounded the list with a 25.53% gain.
- RSA Fund IV – NLPC Pension recorded a 36.23% gain in its RSA Fund IV in 2020. Investment One Pension Managers posted a 27.89% gain, AXA Mansard grew by 24.07%. Fidelity Pension and APT Pension Fund Managers posted 21.86% and 19.22% ROI respectively.
The aggregate returns on investments for the four funds combined stood at 19.3% in the year 2020. Of the 22 PFAs in Nigeria, 11 of them surpassed the average thereby accounting for 50% of the total listed administrators.