Given the uncertainties surrounding major aspects of the Nigerian economy and the constant inflationary pressure eroding the income of average workers in the country, it becomes imperative for people to set aside some portion of their earnings in order to secure their future.
One of the very secure ways of saving for the future in Nigeria is through owning a Retirement Savings Account from the various Pension Fund managers operating in the country. This ensures that the contributors receive withdrawal payment after he/she retires from active service.
The need to save for the future necessitated the enactment of the Pension Reform Act introducing the Contributory Pension Scheme (CPS), which made it mandatory for employers and employees in both the private and public sectors to contribute towards employee retirement benefits.
The scheme (PRA 2014) also introduced a tripartite system in a bid to minimise the possibility of misappropriation of pension funds by setting up three autonomous players – The Regulator, The Administrator and The Custodian.
These funds are managed by the PFAs, which invest in various investment portfolios based on the risk appetite of the fund category. The investment buckets include fixed securities instruments, equities, money market instruments etc.
Meanwhile, years down the line, the Nigerian Pension industry has grown significantly with pension contributors now over 9.5 million, indicating a 14% pension penetration rate. Also, the industry’s asset under management has hit multiple record highs, standing at N13.42 trillion as of December 2021.
Following the significant growth recorded in the industry, the National Pension Commission (PenCom) launched the transfer window in November 2020, which allowed over 50,000 pension contributors to change their pension Administrator in just less than fourteen months.
The transfer window has now increased the level of competition in the industry, forcing PFAs to improve on their services, user experience and importantly on returns. In light of this, here is a compilation of Nigerian PFAs you should look at out for in 2022, based on the aforementioned criteria.
NLPC PFA Limited
NLPC Pension Fund Administrators was incorporated on the 19th of January 2005 and licenced about one year later by the National Pension Commission to administer pension funds in line with the then PRA 2004.
The company has several physical offices in various states across the country and boasts of a shareholders’ fund way above the N1 billion un-impaired capital requirement in the industry. One of the company’s core advantages in terms of operation is its tech-oriented instantaneous service delivery, which has guaranteed its continuous operation for almost seventeen years.
Furthermore, a cursory glance at the company’s January 2022 performance shows impressive growth compared to its returns in the previous year, with an average of 0.83%, resulting to an ROI of 1.02% in its Fund I category.
The company also has a track record of printing impressive returns in its various fund categories. For example, its Fund II has returned 431.86% since its inception in January 2006. Also, its Fund IV has posted a return of 386.81% since its launch in January 2009.
This performance is an indication that there is prospect for NLPC in the country in 2022.
Stanbic IBTC Pension Managers
Stanbic IBTC Pension Managers Limited, which is a subsidiary of Stanbic IBTC Holdings PLC (a member of the Standard Bank Group), is another firm to watch. The firm, which is incorporated on 19th May 2004, has an authorized and paid-up capital of N1 billion, in line with the minimum requirement of N1 billion.
The company is a joint venture between Stanbic IBTC Holdings PLC and Linkage Assurance PLC. Stanbic IBTC Pension Managers Limited is 88.24% owned and managed by the Stanbic IBTC Group
According to the information on the company’s website, a maximum of 75% of its portfolio is being invested in variable income instruments. In the year 2021, Stanbic IBTC Pension was one of the best performing PFAs in the year, with an average ROI of 9.7% in the review year.
Veritas Glanvills
Veritas Glanvills Pensions otherwise known VG Pensions was licensed by the National Pension Commission (PenCom) as a Pension Fund Administrator on the 21st of June 2007 to manage Retirement Savings Accounts (RSA) of individuals/organizations across both the public and private sector in Nigeria.
Veritas Glanvills Pensions is owned by long-standing financial corporates in insurance, Veritas Kapital Assurance Plc and Glanvills Enthoven & Co. Limited, an insurance broking company.
The Pension Fund administrator has an authorized and paid-up share capital of N1.5Billion and operates from seven (7) regional offices in Abuja, Lagos, Ibadan, Port Harcourt, Anambra, Kano, and Jos.
The firm also made the list of best performing PFAs in the previous year, after printing an average return of 8.73% in 2021.
Sigma Pensions Limited
Sigma Pensions Limited commenced operations on the 8th of December 2005 as a licensed pension fund administrator (PFA) following the establishment of the contributory pension scheme in 2004.
In 2016, Actis assumed majority ownership of Sigma through its subsidiary ActisGolf Nigeria Limited with investments of over $7.6 billion. As of December 2020, the company manages over 750,000 RSA accounts nationwide.
Sigma Pension also posted impressive returns in the previous year, with an average ROI of 8.67%, recording growth across its fund categories.
These PFAs has not paid their retirees of 2021 even when Govt had announced the release of funds for that purpose. What is going on? Who is fooling who? The scheme should be scrapped.