Nigeria’s pension industry reached a record N4.16 trillion growth in 2024, bringing total pension assets to an all-time high of N22.51 trillion, up from N18.36 trillion the previous year.
This marks a 22.65% year-on-year increase, according to the unaudited pension fund portfolio report released by the National Pension Commission (PenCom).
Alongside the asset surge, Retirement Savings Account (RSA) registrations rose to 10.58 million by December 2024, reflecting a 3.84% increase with 390,899 new registrants.
Fixed income instruments continued to dominate pension fund allocations, totaling N18.85 trillion and accounting for 83.72% of the entire portfolio. The preference for these securities is driven by their tax-exempt status and lower risk profile, with Pension Fund Administrators (PFAs) heavily investing in federal government securities due to their stability.
Investments in commercial paper experienced a sharp decline of 38.67% to N161.16 billion, down from N262.79 billion in 2023, following the suspension of commercial paper investments in October 2024 due to regulatory uncertainties.
Among the key allocations, federal government securities stood at N14.11 trillion, making up 62.70% of the total pension fund. State government securities amounted to N250.86 billion, while supra-national bonds reached N20.77 billion.
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Corporate debt securities accounted for N2.25 trillion, and money market instruments stood at N2.22 trillion. Equity investments totaled N2.66 trillion, representing 11.81% of pension assets in 2024. Domestic ordinary shares comprised N2.24 trillion, while foreign ordinary shares and private equities accounted for N267.99 billion and N147.86 billion, respectively. PFAs also diversified into mutual funds, infrastructure, and real estate, with mutual funds at N80.72 billion, infrastructure funds at N214.33 billion, and real estate investments at N283.62 billion.
Fund II remained the largest pension fund with assets of N9.24 trillion, accounting for 41.02% of total pension assets. This fund serves as the default for contributors under 49 years, allowing for riskier investments with higher return potential. Fund III followed closely with N5.92 trillion in total assets, while Fund V recorded the lowest at N731.4 million. The Retiree Fund, Fund VI, adopted a more conservative strategy with assets totaling N10.48 billion, focusing on capital preservation.
Key industry developments in 2024 included the lifting of the commercial paper investment suspension by PenCom, allowing Licensed Pension Fund Administrators (LPFAs) to invest again where non-bank capital market operators act as Issuing and Paying Agents (IPAs). The Securities and Exchange Commission (SEC) introduced regulatory interventions to address previous concerns. Additionally, PenCom mandated the use of Bank Verification Numbers (BVN) for RSA registration and data recapture, effective February 1, 2025, to enhance security and integrity within the pension database.
Leadership changes at PenCom also made headlines as Omolola Oloworaran was appointed acting Director-General in 2024, in line with Section 26 (1) of the Pension Reform Act 2014. Despite assuming office without Senate confirmation, Oloworaran has pledged to sustain pension asset growth, expand CPS membership, and promote broader coverage initiatives.
