Nigeria’s pension industry sustained its upward trajectory in May 2025, as total pension fund assets rose to N24.10 trillion, reflecting a 1.91% month-on-month growth from N23.65 trillion in April.
This is according to the latest data from the National Pension Commission (PenCom).
The increase was driven by a combination of new Retirement Savings Account (RSA) registrations, robust investment income, and strategic reallocations across asset classes (both fixed-income and alternative investment classes), despite economic headwinds.
Portfolio allocation breakdown
Government instruments – FGN securities still dominate
Federal Government of Nigeria (FGN) Securities maintained their status as the cornerstone of pension investments, rising slightly by 2.04% to N14.95 trillion, and accounting for 62.06% of total pension assets.
The distribution under the FGN Securities shows that:
- FGN Bonds (Held-to-Maturity) rose by 1.73% to N12.67 trillion, maintaining their dominance as the largest single asset class and representing 52.56% of total Net Asset Value (NAV).
- Treasury Bills increased by 5.15% to N604.59 billion, suggesting a shift toward short-term government instruments in response to anticipated changes in interest rate dynamics.
- Green Bonds posted a marginal gain of 0.74% to N2.32 billion
- Agency Bonds and Sukuk Bonds both recorded declines, down 14.66% and 10.31%, respectively, a signal of softening demand for these instruments.
- State Government Securities dipped 3.07%.
Corporate and money market instruments – Mixed movements
Notably, total investments in Corporate Debt Securities dropped marginally by 0.98% to N2.29 trillion, constituting 9.51% of total NAV.
Pension assets allocated to money market instruments grew by 6.07% to N2.31 trillion — the strongest month-on-month gain across asset classes.
The instruments categorized under the Money market are allocated as follows:
- Fixed deposits and bank acceptances rose 7.58%, totaling N1.96 trillion.
- Commercial papers dipped by 6.78% to N257.67 billion, indicating weakened short-term liquidity for corporates.
- However, foreign money market instruments improved significantly by 19.22% to N68.97 billion, up from N57.86 billion in the prior month — the highest month-on-month increase.
Equities and alternatives – adjusting risk appetite
Diving into the equities markets revealed that both the domestic equities and foreign share recorded growth.
Domestic Equities advanced 6.78% to N2.75 trillion, now accounting for 11.40% of NAV, reflecting improved sentiment toward the Nigerian Exchange.
Foreign Equities rose 4.67% to N290 billion, signaling gradual risk diversification.
Other key investment breakdown includes
- Mutual fund holdings rose by 2.13%, reaching N183.99 billion, driven primarily by Open/Close-End Funds, which gained 2.93%, totaling N107.98 billion.
- Supra-national bonds and private equity exposure rose by 2.12% and 0.55%, respectively.
- Infrastructure Fund increased slightly by 0.36% to N229.88 billion, while REITs edged up 1.15%.
- Meanwhile, Cash and other assets dropped 30.88%, indicating aggressive asset deployment as PFAs reduce idle holdings in favor of income-generating investments.
RSA registrations and fund dynamics
As of May 2025, total RSA registrations reached 10.76 million, up from 10.72 million in April, maintaining consistent growth in coverage.
- Fund II, the default fund for active contributors under 49 years, retained its dominance with N10.04 trillion in assets, representing a commanding 41.65% of total pension assets. This underpins its role as the backbone of the pension system.
- Fund III (typically for contributors aged 50 and above) rose to N6.32 trillion, accounting for 26.24% of the total pension asset, reflecting steady accumulation among older RSAs.
- Fund IV (Retiree Fund) posted N1.79 trillion, a 7.42% contribution, as pensioners maintain stability-focused allocations.
- Fund I, targeted at aggressive investors under 49, climbed 4.73% to N319.34 billion, suggesting modest traction in high-risk appetite.
- Fund V (Micro Pension Fund) inched up to N1.41 billion, a marginal yet crucial 0.04% foothold for informal sector coverage.
Legacy schemes: CPFAs and AES
Notably, Closed Pension Fund Administrators (CPFAs) and Approved Existing Schemes (AES) held N2.62 trillion and N2.85 trillion, marking solid double-digit, accounting for 10.80% and 11.81% of the total NAV, respectively.
What you should know
The data for May 2025 underscores the cautious optimism guiding Nigeria’s Pension Fund Administrators (PFAs), who continue to lean on FGN instruments for stability while trying to explore high-yield alternatives like private equity, infrastructure, and foreign markets.
The uptick in foreign equity and private markets signals that PFAs are gradually seeking returns beyond the traditional safe havens — a trend likely to continue in a high-inflation, low-interest rate environment.
