Pension Asset Rises to N17.1trn in July 2023, Showing 2% Monthly Increase


The latest data from the National Pension Commission (PenCom) indicates that the total asset under management (AUM) of the regulated pension industry reached NGN17.1trn as of July 2023, marking a 2% month-on-month increase. This growth rate, although slightly slower than the previous month’s 4%, reflects a substantial 18.9% increase compared to the previous year.

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While the AUM growth rate has moderated from the earlier robust rates witnessed during the pension reforms, there remains considerable potential for expansion given the relatively untapped state of Nigeria’s pension industry.

The industry’s AUM represents around 8.6% of the 2022 GDP, a figure that pales in comparison to the global average of 29.4% according to World Bank data.

The distribution of AUM across asset classes has remained relatively steady, with FGN bonds constituting the majority at 61.9% of the total AUM, amounting to NGN10.6trn. This category experienced a 2% month-on-month increase and a 21% year-on-year increase.

Notably, pension funds tend to favor bonds as they can effectively match their long-term liability obligations with fixed-maturity bonds. The growth in pension fund holdings of FGN bonds is also attributed to increased issuance of FGN paper to address the estimated budget deficit.

The portion of pension funds’ AUM allocated to domestic equities rose by 6% month-on-month to NGN1.3trn, accounting for 7.8% of the total allocation. In contrast, the allocation to corporate debt, the second-largest share at 10.8%, experienced a decline of -2% month-on-month to NGN1.8trn.

Moreover, the industry’s asset allocation to money market instruments saw a slight uptick of 1% month-on-month to reach NGN1.6trn, representing approximately 9.3% of the total pension assets.

The data also revealed that the total number of pension accounts increased by over 16,000 month-on-month, reaching 10 million accounts, with an average value of NGN1.5m per RSA account holder, slightly lower than the NGN1.67m reported the previous month.

Gbenga Samson
Gbenga Samson
Samson Gbenga Salau [Editorial Board Adviser] Gbenga Samuel Salau is a professional journalist with over 17 years experience in journalism, he is a graduate of Communication and Language Arts, University of Ibadan. On completion of his youth service, he joined The Guardian as a freelance journalist and was later absorbed as a staff. While in the University, he was a campus journalist reporting for the Independence Hall and Faculty of Arts Press Clubs. As a campus journalist, he won the following awards; Independence Hall Press Best News writer; University of Ibadan Union of Campus Journalists’ Best News Reporter/Writer; First Runner-up, Reuben Abati Award for Investigative Journalism; Association of Faculty of Arts Students’ Press Best Reporter; University of Ibadan Union of Campus Journalists’ Best Political Writer; Winner, Reuben Abati Award for Investigative Journalism, and University of Ibadan Union of Campus Journalists’ Best Interviewer. He served the Association of Communication and Language Arts Students, as the Public Relation Officer, the same year he was appointed the News Editor of the Association of Faculty of Arts Students Press. The following session, he was made the General Editor, and a member of the 13-man University of Ibadan Students’ Union Transition Committee. As a reporter in The Guardian, in 2014, he won the Promasidor Quill Award Best Report on Nutrition and DAME Business Reporting category. In the 2015 edition of the Promasidor Quill Award, he won the best Report on Nutrition and Brand Advocate Categories, while in 2016, he won the NMMA Print Journalist of the Year, first runner-up Golden Pen Reporter of the Year and SERAs CSR Awards. Gbenga Salau loves traveling, reading, and listening to songs with good lyrics no matter the genre.

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