The National Pension Commission (PenCom) has called on Pension Fund Administrators (PFAs) to broaden their investment strategies by increasing allocations to alternative assets, including infrastructure and private equity, to improve returns and promote long-term sustainability of pension funds.
Speaking at a sensitisation workshop in Lagos for Chairpersons of PFAs’ Board Investment Strategy and Risk Management Committees, PenCom Director-General Omolola Oloworaran noted that over 80 per cent of current pension assets are invested in fixed-income securities, with Federal Government securities accounting for 62 per cent of total assets.
As of May 30, 2025, the pension fund assets stood at ₦24.11 trillion.
Oloworaran warned that the present macroeconomic environment — characterised by high inflation, forex volatility, and declining purchasing power — demands more dynamic and resilient investment strategies.
“In this context, alternative assets provide a complementary pillar to the core investment strategies of pension funds,” she said.
She explained that investments in infrastructure and private equity better align with the long-term horizon of pension fund liabilities and offer avenues for diversification, higher risk-adjusted returns, and economic development.
PenCom’s renewed emphasis on diversification aims to encourage PFAs to explore new opportunities beyond the safety of government bonds, especially as global best practices in pension fund management favour blended portfolios that mitigate concentration risks.
The workshop also served as a platform for stakeholders to discuss regulatory frameworks, risk management practices, and success stories from markets that have effectively integrated alternative asset classes into pension fund strategies.
