The Nigerian pension industry is one of the key sectors of the Nigerian economy, with over 9.5 million pension contributors as of March 2022 and N13.88 trillion in fund under management.
Pension Fund Administrators (PFAs) seldomly generate significant annual returns in their RSA funds, given the conservativeness of the investment portfolios for most of the PFAs in the country. A deep dive into the data from the National Pension Commission, shows that 61% of the total pension fund is invested in government securities, most of which are in federal government bonds.
However, there are some pension fund managers that have been able to beat this odd, with significant returns in their fund performance based on the depth of their investment teams in managing funds, one of the notable names is NLPC Pension Fund Administrators Limited.
In the business of wealth creation and management, the long-term performance of most asset class or security is very important in making a choice. A look at the performance of Pension Fund managers from the inception of their funds reveals that NLPC PFA is one of the biggest names and performers in the industry.
The RSA Fund II category, which is a default fund for contributors who are 49 years and below due to the riskiness of the assets. According to the section 7.3.1 of the amended regulation for the investment of pension fund assets, the maximum exposure to variable income instruments for RSA Fund II is 55%. Although, the Fund I category is the riskiest with 75% maximum exposure to variable instruments.
Most contributors fall under the RSA fund II category, as the fund boasts of a sum of N6.06 trillion under management, representing 43.6% of the total pension fund asset. In line with this, we take a look at the performance of the company in the Fund II category.
How NLPC has performed
NLPC Pension Fund Administrator has made a 446.06% return on investment on its Fund II category between June 2006 and the end of March 2022. The company ranked among the best performing PFAs from inception to date.
The fund, which was priced flat at N1 as of June 2006, has risen to as high as N5.4606 as of the end of March 2022 (less than 16 years). Only five PFAs have achieved such feet, as the company made a return on investment (ROI) of 446.06%.
Meanwhile, NLPC Pension was incorporated in January 2005 and licensed by the National Pension Commission (PenCom) to administer pension funds in line with the provisions of the Pension Reform Act of 2004. Since the incorporation and commencement of operation, the company has been at the forefront of pension fund management.
The company was also able to meet the Minimum Regulatory Capital requirement of N5 billion shareholders’ funds before the April 27, 2022. PenCom, the apex regulatory body, had announced that 20 PFAs have been able to meet its recapitalization standard for PFAs, with a 12-month transition from April 27, 2021 to April 27, 2022.
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