Nigeria’s pension fund appreciated by ₦256.76 billion, or 1.27%, in June 2024, reaching a total of ₦20.48 trillion, up from ₦20.23 trillion in May, according to the latest data released by the National Pension Commission (PenCom). This growth highlights a continued trend of increasing investments in Federal Government securities by pension fund administrators.
The unaudited report on the pension funds industry portfolio for the period ending June 30, 2024, reveals that Federal Government securities, including bonds, treasury bills, sukuk, and green bonds, continued to attract significant investments. As of June, these securities accounted for approximately 63.27% of the total pension fund, a slight increase from 63.22% in May.
Corporate debt securities represented 10.78% of the pension fund, while money market instruments comprised 9.34%. Investments in mutual funds decreased marginally to 0.41% from 0.47% in the previous month.
Retirement Savings Account (RSA) Growth
The number of Retirement Savings Accounts (RSAs) grew modestly to 10,381,019 in June from 10,351,624 in May, reflecting a 0.28% increase. This rise in RSA registrations underscores the pension industry’s resilience and growth, despite the economic challenges posed by inflation.
PenCom’s first-quarter report indicates that participation in the pension industry has been steadily increasing. The number of new RSA registrations rose from 88,213 in Q4:2023 to 89,061 in Q1:2024, demonstrating a positive trend in the uptake of pension schemes.
The increase in the pension fund value can be attributed to the strong performance and higher patronage of Federal Government securities. These instruments continue to be a favored investment choice for pension funds, reflecting confidence in government-backed investments amidst economic uncertainties.
The data suggests a continued focus on government securities, with a stable increase in RSA registrations indicating ongoing confidence in the pension system. The modest decline in mutual fund investments may signal a shift towards more stable and secure government-backed assets. As inflationary pressures persist, the pension industry’s growth and stability will remain crucial. The ongoing investment in Federal Government securities and the steady rise in RSA registrations highlight a resilient pension sector adapting to economic conditions. PenCom’s future reports will provide further insights into the evolving trends and investor behavior within Nigeria’s pension fund industry.
