Pension fund assets hit N11.57trn, rise by 11% in 1 year

Pension fund assets hit N11.57trn, rise by 11% in 1 year

The aggregate value of pension fund assets in Nigeria has recorded significant gain to hit N11.57 trillion after advancing by 11 per cent within a year.

Despite the many challenges that characterized the year, pension fund assets in the country gained N1.76 trillion equivalent to 11 per cent growth in the last one year, growing from N9.81 trillion in October 2019 to N11.57 trillion at the end of September 2020.

The huge gains, according to findings, was attributed to new pension contributions received, interests from fixed income securities and net realised on equities and mutual fund investments

Findings further showed that investment income was instrumental to the continuous growth in pension funds, despite the fact that governments at majorly state level are not paying the monthly pension contributions of their workers as and when due.

Over time, pension fund operators have invested over N7 trillion of pension assets in federal government bonds as it gives better returns on investment, but throughout last year, bond yields dropped drastically, prompting pension fund administrators (PFAs) to consider opportunities in other investment outlets, especially the domestics equities market.

In the latest document released by the National Pension Commission (PenCom) which detailed pension fund transactions for September 2020, N7.55 trillion of the pension assets was invested in federal government securities, of which N6.64 trillion went to bonds; N780.57 billion invested in treasury bills; N10.61 billion in agencies bonds; N107.58 billion in Sukuk and N13.05 billion in green bonds.

The pension sector regulator posited that N150.33 billion was invested in state government securities; N585.77 billion in domestic ordinary shares; N76.45 billion in foreign ordinary shares; N17.64 billion in foreign money market securities and N54.57 billion in infrastructure.

Meanwhile, pension fund operators under the auspices of the Pension Fund Operators Association of Nigeria (PenOp) had earlier assured Nigerians of the safety of the N11.57 trillion pension fund assets in the country.

The operators stated that the fund is adequately secured and that there are enough protections to ensure that the fund is not tampered with.