The investment of pension assets in Federal Government securities has increased by 19% from N11.03 trillion in July 2023 to N13.18 trillion in July 2024, according to the National Pension Commission’s (PenCom) monthly unaudited report on the pension funds industry portfolio.
In July 2023, when total pension fund assets amounted to N17.07 trillion, more than half was invested in Federal Government of Nigeria (FGN) securities, totaling N11.03 trillion.
By July 2024, the total pension assets had grown to N20.87 trillion, with approximately N13.18 trillion allocated to FGN securities.
The Pension Fund Operators Association of Nigeria (PenOp) noted that the increase in FGN securities reflects their steady returns and perceived security, which makes them a cornerstone of pension fund portfolios.
In addition to FGN securities, investments in other asset classes have also risen year-on-year.
Investments in private equity grew by 70% to N104.7 billion in July, indicating strong interest in high-growth opportunities in private markets.
Investments in equities increased by 40% over the past year, reaching N2.16 trillion in July from N1.54 trillion previously.
This rise highlights robust stock market performance and the potential for higher returns.
Investments in corporate debt also saw a 22% increase, showing a strong demand for corporate bonds and other debt instruments that offer stable returns while managing risk.
Overall, pension assets in Nigeria have grown significantly over the years, driven by strategic investments across various sectors.
This year marks the 20th anniversary of the Contributory Pension Scheme in Nigeria, which was established by the Pension Reform Act of 2004
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The Contributory Pension Scheme, as mandated by the Pension Reform Act 2014, requires employees and employers in both the public and private sectors to contribute a minimum of 18% of an employee’s monthly salary into their Retirement Savings Account (RSA).
These contributions are then managed by Pension Fund Administrators (PFAs) with a focus on safety and fair returns, under strict PenCom regulation.
According to PenCom’s Regulation on Investment of Pension Fund Assets, pension operators are permitted to invest in various instruments, including bonds, treasury bills, debt securities, redeemable preference shares, corporate debt, publicly listed company shares, bank deposits, and other financial instruments, as long as they meet the specified criteria.
