…as pension assets hit N19.8trn in Feb
Pension assets under the management of Closed Pension Fund Administrators (CPFAs) in Nigeria increased by N646.29 billion from N1.944 trillion as of December 2023 to N2.59 trillion as at the end of February 2024.
This is as the total pension assets in the country rose to N19.8 trillion as of February this year, up from N18.4 trillion as of December 2023, representing an increase of N1.4 trillion during the first two months of this year, an analysis of pension assets in the country shows.
This implies that the increase in pension assets under the CPFA management accounted for 46.03 percent of the increase in the total pension assets in the country, The Nigerian Observer estimates reveal.
On the status of a CPFA, the National Pension Commission (PENCOM), says “Any employer managing its existing pension scheme before the enactment of the Pension Reform Act 2004 may apply to the National Pension Commission to be licensed as a Closed Pension Fund Administrator to continue to manage such pension scheme.”
PENCOM adds that “A closed PFA cannot open or manage RSA for employees other than its employees or employees of its parent company if it is a subsidiary.”
In Nigeria, the CPFAs currently in operations include Nestle Nigeria Trust CPFA, Nigerian Agip CPFA, Progress Trust CPFA, Shell Nigeria CPFA, and TotalEnergies EP Nigeria CPFA.
The total pension fund assets in the country are managed under the existing schemes, CPFAs, Fund I to VI.
Existing scheme grew by 4.64 percent or an addition of N97.7 billion to N2.10 trillion in December, to hit a new level of N2.201 trillion as of February, contributing 6.96 percent to the total increase in pension assets in the country.
Fund I grew by 18.3 percent to N179.04 billion as of February this year, compared to N151.35 billion last December. Fund II rose by 5.2 percent to N8.21 trillion last February, compared to N7.80 trillion as of December 2023, representing an addition of N408.6 billion. Fund I has 75 percent maximum exposure of its portfolio value to variable income instruments.
In terms of weight, the increase in Fund II accounted for 29.10 percent of the total increase in the nation’s pension assets within the first two months of this year. Fund II has 55 percent maximum exposure of its portfolio value to variable income instruments.
Fund III added N170.13 billion to its December 2023 assets of N4.94 trillion, to reach a new height of N5.12 trillion in February of this year. This fund accounted for 12.12 percent of the increase in total pension assets in the country between December 2023 and February 2024. The maximum exposure of its assets to variable instruments under this fund is 20 percent.
Fund IV added N49.56 billion to its December 2023 assets of N1.36 trillion to hit N1.41 trillion as of February 2024, thus accounting for 3.5 percent of the total increase in the pension assets in the country. The maximum of this fund that can be exposed to variable instruments is 10 percent of its portfolio value.
Fund VI rose partly by N3.11 billion to N49.52 billion as of February this year, compared to N46.40 billion as of December 2023.
In terms of classes of assets, FGN securities accounted for the bulk of pension assets as of February this year, amounting to N12.37 trillion, representing 62.6 percent of the total pension assets under management as of the reference date.
This is followed by corporate debt securities that worth N2.30 trillion amounting to 11.7 percent of the total pension assets under management in the country currently.
