Pension fund assets in Nigeria increased by N186.43 billion in the first quarter of 2019 to push the total pension assets to N9.03 trillion.
This is according to the analysis of the Summary of Pension Fund Assets recently released by the National Pension Commission (PenCom) covering the first quarter of 2019.
The breakdown: According to the PenCom report, the total monthly pension contributions received from contributors from both the public and private sectors hit N5.28 trillion as at the end of the first quarter, 2019. This shows an increase of N186.43 billion, representing a 3.66% growth over the total contributions in one quarter.
During the first quarter of 2019, the total contributions received from the public sector amounted to N93.80 billion (50.31%) while the private sector contributed N92.63 billion (49.69%).
Pension Fund Investment: In the first quarter of 2019, the total pension fund assets grew from N8.64 trillion as at the end of December 2018 to N9.03 trillion as of March 2019, representing a growth of 4.55% (N393.06 billion). The growth indicates an increase in the quarterly growth rate compared to 3.49% for the previous quarter.
- Over the years, a larger chunk of the pension fund has been invested in FGN securities, which are regarded as safe with low investment returns.
- In the first quarter of 2019, FGN Securities still accounted for 72% (N6.5 trillion) of the total pension fund in Nigeria. Items listed under FGN securities include FGN Bonds, Treasury Bills, Agency Bonds, Sukuk Bonds, Green Bonds and so on.
Schemes Membership: Further breakdown shows that the pension industry recorded a 1.87% growth in the scheme membership during the first quarter of 2019, moving from 8.47 million contributors at the end of the preceding quarter to 8.63 million.
- According to the PenCom report, the growth in the industry membership was driven by the Retirement Savings Account (RSA) Scheme, which had an increase of 158,853 contributors representing 1.89%.
- However, membership of the Closed Pension Fund Administration (CPFA) Scheme declined by 16 members (23,316) while the Approved Existing Scheme (AES) membership remained unchanged at 40,951.
A breakdown of the RSA registrations indicated a 0.87% (31,508) increase in
RSA membership from the public sector during the first quarter of 2019 to stand at
3.6 million, which represented 42.49% of the total RSA registrations.
- In addition, private sector membership increased by 2.65% (127,345) in the quarter under review, which brought total registrations from this sector to 4.9 million representing 57.51% of total RSA membership.
- PenCom noted that the growth in RSA membership can be attributed to the increased level of compliance by the private sector as a result of the various steps taken by the Commission to improve compliance and coverage, as well as the marketing strategies of the PFAs.
Withdrawals from RSA: During the quarter, approval was granted for payment of N4.51 billion to 10,733 RSA holders who were under the age of 50 years and were disengaged from work and unable to secure another job within 4 months of disengagement.
- The cumulative total number of RSA holders who were paid benefits for a temporary loss of job was 313,468 and were paid a total of N107.93 billion being 25% of the balances of their RSAs as prescribed by the Pension Reform Act 2014.
- Further analysis showed that the private sector accounted for 95.38% of those who benefitted from these payments while the public sector accounted for 4.62%.