In a recent release by the National Pension Commission (PenCom), data reveals a noteworthy uptick in Nigeria’s pension fund assets, reaching a substantial N17.658 trillion as of October 31, 2023. This marks a commendable 1.78% increase compared to the N17.349 trillion reported in September 2023, showcasing the resilience and growth of the pension sector.
Portfolio Allocation Insights
The monthly report for October 2023 sheds light on the portfolio allocation within the pension fund landscape. The total net asset value (NAV) of pension funds rose to N17.658 trillion in June, reflecting an increase from the N17.349 trillion reported a month earlier. Notably, investment in Federal Government of Nigeria (FGN) securities continues to dominate portfolio allocation, accounting for approximately N11.419 trillion or 64.67% of the total NAV.
Pension funds also allocated N1.881 trillion to Corporate Debt Securities and N1.688 trillion to Money Market Instruments. Investments in ordinary shares of local companies experienced a 3.17% rise, reaching N1.430 trillion from N1.386 trillion in September.
Fund Allocation Highlights
Within the Active Retirement Savings Account (RSA) Funds, Fund II, the default RSA Fund under the Multi-Fund Structure, maintained the largest share with N7.581 trillion, representing 43% of the total fund NAV. Following closely, Fund III rose by 1.62% from N4.754 trillion to N4.831 trillion, securing its second position for fund allocation.
Meanwhile, RSA membership for October 2023 increased by 1.15% to 10,140,929 from 10,025,314 members in July 2023, indicating sustained participation and engagement within the pension system.
Optics and Growth Trends
The report highlights a remarkable trajectory in pension fund net asset values, surging from N14.9 trillion in December 2022 to an impressive N17.7 trillion by October 2023. This represents a substantial N2.8 trillion increase, reflecting an 18.79% growth. In comparison, between 2021 and 2022, pension fund assets rose by N1.57 trillion, from N13.42 trillion to N14.99 trillion.
The surge is attributed to a combination of increased pension fund contributions and a rise in portfolio values. For instance, FGN Securities witnessed a notable increase in net asset values, rising from N9.64 trillion in 2022 to N11.19 trillion as of October 2023. This growth underscores the robustness of Nigeria’s pension sector and its pivotal role in the country’s financial landscape.
