Pension fund assets grow by N843 billion in H1 2022
Nigeria’s pension fund assets have increased significantly by N843 trillion in the first half of the current year, from N13.42 trillion in December 2021 to N14.27 trillion at the end of the year. end of June 2022, the first half of the year, learned LEADERSHIP.
At the same time, 266,830 new workers in the public and private sectors joined the contributory pension scheme (CPS), during the first half of the current year.
In the latest data from the National Pensions Commission (PenCom), total pension funds increased by 6.28% from 13.42 trillion naira in December 2021 to 14.27 trillion naira in June 2022 .
Similarly, investment in corporate debt securities increased significantly by 26.11% to N1.19 trillion during the reporting period (year-to-date), while PFAs increased significantly. increased their investments in real estate by 50.66% to reach N236.2 billion in June. 2022 from N156.8 billion recorded at the start of the year.
The report said investments in private equity funds fell slightly by 0.24% to 38.87 billion naira from 38.96 billion naira. Additionally, PFA allocations to FGN securities amounted to N9.01 trillion, an increase of 2.67% from N8.77 trillion in December 2021, and investments in FGN securities accounted for approximately 63% of the total pension fund.
The RSA II fund accounted for the bulk of the contribution to the fund with 6.24 trillion naira, or 43.7% of total pension funds, followed by the RSA III fund with 3.86 trillion naira, which accounts for 27% of total assets and existing plans. accounted for 10.1% of total funds, increased by N85.78 billion to N1.44 trillion, while CPFAs accounted for 10.7% of total funds, amounting to 1, 52 trillion naira during the reporting period.
Only 4 States, FCT Remitting Workers’ Pension Under CPS – PenCom
Pension fund trustees increased their exposure to the Nigerian stock market in the first half of the year, investing an additional N53.85 billion in the local stock market, bringing total investments to N969.16 billion. of naira.
According to the LEADERSHIP survey, investment income has played a key role in this increase in pension fund assets, despite the fact that governments at most state levels do not pay the monthly pension contributions of their workers at maturity.
Similarly, the huge increase, according to the findings, was attributed to new pension contributions received, interest from fixed income securities and the net amount realized on equities and mutual fund investments.
At the same time, registrations for the Retirement Savings Account (RSA) increased by 2.8% to 9.79 million against 9.53 million recorded in December 2021, which represents an increase of 266,830 new workers entering in the system during the first six months of the year.
Speaking recently in an exclusive interview with LEADERSHIP, the Managing Director/CEO of ARM Pensions, Mr. Wale Odutola, said that pension fund operators invest most of their investments in federal government bonds because it it is the safest investment instrument that consistently gives good returns on investment.
Although, he said, each PFA has their investment model that suits them best, he added that, even with falling bond yields, it is still the safest.
According to him, “So each PFA has different investment strategies and they always invest in investment opportunities based on what suits their investment strategies. Thus, the capital market is an investment outlet that we look at, just like fixed income securities, government securities, money market instruments, etc.
He said, however, that the security of pension fund assets is relevant to operators, they are also concerned about the returns on investment for pension contributors, adding that the growth in pension fund assets in recent years was attributable returns on investment rather than contributions.
This, he said, shows that operators are investing wisely, adhering to pensions industry investment guidelines as set out in the Pensions Reform Act (PRA) 2014, indicating that PFAs will continue to play an active role in capital market transactions in the current. year.