From grass to glory: NPF Pensions’ 10-year odyssey. 2022 has been tagged “NPF Pensions’ year of quantum leaps.” But 2023 is a lot better. As it celebrates its tenth anniversary, the PFA’s Assets under Management (AuM) has crossed the N1 trillion threshold, the fourth in the industry to achieve the incredible feat despite its constraints as a mono-clientele PFA.
Saturday, October 21, 2023, was exactly ten years since the Nigeria Police Force Pensions Limited was incorporated. It was a child of necessity which started operations as a Pension Fund Administrator a year later, making it the 21st PFA in the country’s Contributory Pension Scheme (CPS) in accordance with the 2014 Pension Reform Act (PRA 2014). The idea was to have a Pension Fund Administrator (PFA) exclusively responsible for the pension assets of all police personnel in Nigeria.
It has been ten years of unprecedented achievements. Before the NPF Pensions Limited came on board, Nigerian policemen were scattered in the already licensed 20 PFAs. But their fortunes have changed dramatically ever since.
Incorporated with a fully paid share capital of N1 billion and a mission “to provide quality customer, financial advisory services to stakeholders and adopt investment strategies that would yield the best possible returns on their pension assets,” the management and staff of the PFA have gone beyond the call of duty to ensure seamless retirement for policemen.
Yet, the challenges at inception were such that would have wheedled the unwary. But the management team led by Dr. Hamza Sule Wuro Bokki, a man with decades of experience in investment banking, corporate governance and human resource management, stepped up to the plate effortlessly.
Prior to coming on board, many policemen were neither receiving statements on their Retirement Savings Accounts (RSA) nor had any communication with the PFAs. So, the first task was to get in touch with their clients by locating policemen wherever they were in Nigeria. Offices were set up in all the 56 police formations and commands across the country.
Working also through the police pension offices and six regional offices with desk officers, NPF Pensions Limited took its services directly to the officers wherever they were located.
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To ensure that issues are addressed instantly, all the 62 offices are online, real time. It was a strategic move that not only eased the access of police officers to information, but also dramatically eased the stress of documentation by creating awareness.
Obviously, it was going to require a team prepared to think out of the axiomatic box to successfully manage the pension assets of Nigerian policemen.
Ten years after, the jury is in that despite the constraints, NPF Pensions has delivered handsomely on its mandate with a bountiful harvest of firsts.
Today, it is the best police investment entity, ranks first in investment performance for two consecutive years in the pensions industry and is also the first and only PFA to attain the enviable position of overall performance in investment returns across the four main retirement savings accounts funds. Since 2022, the PFA’s investment returns have grown in leaps and bounds.
For instance, according to data released by PenCom at the end of 2022, NPF Pensions closed the year as one of the only two top PFAs by investment returns. While its Fund I, meant only for those aged 49 years and below, appreciated by 11.89 per cent; Fund II, which is the default fund for all active pension fund contributors that are 49 years and below, appreciated by 11.17 per cent; Fund III, which is the default fund for active contributors that are 50 years and above, went up by 10.77 per cent; and Fund IV, which is strictly for retirees, by 10.54 per cent.
But for those who thought that the 2022 performance was a flash in the pan, the Q1 2023 result proved most conclusively that the NPF Pensions Limited is the industry leader having emerged the best performing PFA, outperforming all others in all the four funds.
While Fund I returned 8.86 per cent, Fund II returned 5.97 per cent, Fund III 7.78 per cent and Fund IV returned 3.88 per cent. The feat is even more spectacular because no other PFA came second in all four funds. While Stanbic IBTC Pension Managers, CrusaderSterling Pensions, and Fidelity Pensions also had strong performances in some funds, NPF Pensions Limited was in a league of its own – unparalleled, incomparable, unsurpassed and peerless.
Summing up the incredible outing in an article titled, “Performance of Pension Funds for Q1 2023,” Nairametrics, one of Nigeria’s leading online business magazines, said, “NPF Pensions is the runaway performer when it comes to investment returns on their portfolios for Q1 2023 … The PFA offers Funds I, II, III and IV and all four funds took the top spot outperforming all 18 others.”
But even as industry watchers marvel, there is, it seems, no slowing down in the quest of NPF Pensions Limited to remain dominant.
In the August 2023 returns, the PFA again came tops with an outstanding 2.27 per cent growth, beating Stanbic IBTC – 1.13 per cent, Access Pensions Limited – 1.08 per cent, and Pensions Alliance Limited – 1.05 per cent to the second, third and fourth positions respectively.
The return on investment in the RSA Fund 2 in August also bears the same testimony of excellence. Again, NPF Pensions came tops with a 2.32 percentage growth where the industry average for the 19 other PFAs was 1.06 per cent. On Fund 3 where the industry average was 0.98 per cent, NPF Pensions outclassed all others with an impressive 2.11 percentage growth.
On November 30, 2023, PenCom released the performance chart of all PFAs in Nigeria from January to October 2023.
While as the performance of all PFAs in Nigeria from January to October for Funds 1, 2, 3 and 4, was green, meaning that no PFA had a negative return on investment for the period under review, the NPF Pensions Limited is the only PFA that appeared top five in the four funds. This is an incredible achievement.
As a child of necessity created to meet the peculiar needs of the personnel of the Nigeria Police Force, the NPF Pensions Limited’s achievements are, no doubt, impressive. But beyond that, they have become measuring rods in the industry. To be sure, that is exactly what the returns on investment results in the first three quarters of 2023 have proved most conclusively – yesterday’s child of necessity has become the indisputable industry leader.
Not only that, NPF Pensions has the fastest growth rate in the industry, achieving positive financial performance in 2022 with total income increasing by 20.93 per cent to nearly N9.20 billion compared to N7.61 billion in 2021 and a 47.75 per cent rise in Profit After Tax (PAT) to N2.12 billion compared to N1.44 billion in 2021 .
The company’s cost-to-income ratio decreased to 66.78 per cent in 2022 from 72.86 per cent in 2021. The five-year average ratio stands at 68.19 per cent. The PFA ended the 2022 financial year with 323,096 RSA holders, an increase of 20,852 RSA holders from 302,244 in 2021.
Its audited Assets under Management (AuM) grew by 18.08 per cent, totaling N827.60 billion, compared to N700.91 billion in 2021.
A staff of PenCom described 2022 as “NPF Pensions’ year of quantum leaps.” But 2023 is a lot better. As it celebrates its tenth anniversary, the PFA’s AuM has crossed the N1 trillion threshold, the fourth in the industry despite its constraints as a mono-clientele PFA.
The Board of NPF Pensions Limited approved a N400 million annual Retiree Resettlement Support Scheme (RRSS) in 2017 from its internal funds to cater for retirees while awaiting their pension. Colossal as the sum was, it was still scaled up to N450 million in 2018. Today, it is a whopping N500 million, paid to retirees gratis from the income the PFA makes to alleviate their suffering. Till date, it remains the first and only PFA to embark on such corporate social responsibility (CSR) to its clients.
Again, only six years after it began operations, NPF Pensions Limited became the first and only PFA to build a corporate head office.
While commissioning the ultra-modern building on October 20, 2020, former President Muhammadu Buhari called the achievements of the PFA impressive.
All these achievements wouldn’t have been possible without a formidable management team that has been widely acknowledged as one of the best in the industry.
Considering its incredible achievements, clinking of glasses will be apposite on this tenth anniversary of a PFA that not many gave any chance. But for a management that believes the best reward for these feats is the smile on the faces of appreciating policemen, serving and retired, the drums may not be rolled out.
But policemen are ululating because their PFA, unarguably the most successful company to be established in the Nigeria Police Force, has, in just ten years, most credibly stamped the Force’s footprint in the pension industry.
