Assets under the Contributory Pension Scheme rose to N13.18tn at the end of October last year from N12.3tn in December 2020, data obtained from the National Pension Commission have shown.
PenCom, its latest unaudited report on pension funds industry portfolio, said the total Retirement Savings Accounts rose from 9,215,788 in December 2020 to 9,484,524 at the end of October 2021.
The operators invested N8.33tn of the funds in Federal Government’s securities, while the rest was invested in other portfolios such as domestic and foreign ordinary shares, corporate debt securities, local money market and mutual funds.
According to Agusto & Co, a pan-African credit rating agency, the Nigerian pension industry’s net assets are expected to hit the N20tn mark by 2023.
It said in its 2021 insurance industry report that the growth in the pension industry’s managed assets had been largely driven by investment returns and additional contributions, to a lesser extent.
The rating agency noted that the pension industry’s assets under management stood at N12.3tn as of December 31, 2020, representing a 20.6 per cent growth over the N10.2tn reported at the end of 2019 and an 18.3 per cent compound annual growth rate over the last five years.
The report said the industry’s annual contributions over the last five years had averaged N699bn while withdrawals had averaged about N341bn, translating to a net annual contribution of N347bn and accounting for 26.6 per cent of the industry’s AuM growth over the period.
It said the remaining 73.4 per cent of average growth was attributable to investment returns earned on the portfolios.
Agusto & Co said, “The pension transfer window opened on November 16, 2020 to allow pension Retirement Saving Account holders to switch Pension Fund Administrators once a year at most and no cost.
“As of the end of the second quarter of 2021, over 25,600 RSA holders with pension assets over N102.5bn were reported to have changed PFAs.”
Competition is expected to intensify in the pension industry as PFAs seek to attract new enrollees while retaining existing ones, according to the rating agency, according to the report.
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