PFAs Invest N8.56tn Of Pension Assets In FG Securities

Nigeria’s pension industry regulator, the National Pension Commission, said the country’s pension assets grew from N3tn in 2012 to $33.79bn (N14.05tn) in May 2022.

A chunk of the funds were invested in federal government securities, according to analysis done by THE WHISTLER.

Based on the unaudited report on Pension Funds Industry Portfolio, the funds which closed on December 31, 2021, at N13.42tn, rose to N13.61tn and N13.76tn as of the end of January and February 2022, respectively.

The funds include: ‘Approved Existing Schemes, Closed Pension Fund Administrators and RSA funds.

PenCom has been strategic in its ambition to grow the pension industry and induce confidence in the system.

The regulators concluded a recapitalisation exercise for Pension Funds Administrators from N1bn to N5bn, leading to the reduction of the number of PFAs from 22 to 20.

Regulations allow fund managers to invest 25 per cent in equities, 35 per cent in the money market and the rest in government bonds.

A breakdown of how PFAs invested the funds revealed that most of the funds were invested in FGN securities including Federal Government Bonds (N8.22tn), Treasury Bills (N149.8bn), Green Bonds (N55.13bn), SUKUK (N122bn) and Agency Bonds (N13.46bn) which accounted for N8.5tn or 60.9 per cent of the funds assets.

The country’s PFAs also invested N2.25trn in money market instruments including Fixed Deposits (N1.99tn); Commercial Papers (N264.5bn); Foreign Money Market Instruments (N14.5bn).

The PenCom report revealed that N1.17tn was invested in Corporate Debt Securities like Corporate Bonds, Corporate Infrastructure Bonds and Corporate Green Bonds.

PFAs invested N1.105tn to acquire Domestic Ordinary Shares (N999.01bn) and Foreign Ordinary Dhares (N106.6bn).

Investment in Real Estate amounted to N235.9bn in May; Infrastructure Funds N70.1bn; Mutual Funds N61.5bn among others.