Pension assets grow on N843b gain; 27,000 RSA holders change PFAs
By Jeph Ajobaju, Chief Copy Editor
Pension fund assets climbed to a historic N14.27 trillion in the first half of 2022 (H1 2022) after gaining N842.7 billion on N13.42 billion in January, according to the latest report from the National Pension Commission (PenCom).
A total 27,157 Retirement Savings Account (RSA) contributors switched Pension Fund Administrators (PFAs) in H1 2022, bringing the total number of switchers to 78,549 since the launch of the transfer window.
PFA switchers increased 20.1 per cent in the first quarter of the year ended March (Q1 2022), the highest quarterly movement, sign of a highly competitive industry.
RSA registrations rose 2.8 per cent to 9.79 million in H1 2022 from 9.53 million in Q4 2021, an increase of 266,830.
Other highlights
Total pension funds increased 6.28 per cent from N13.42 trillion in Q4 2021 to N14.27 trillion in H1 2022.
Investment in corporate debt securities rose 26.11per cent to N1.19 trillion year-to-date (YTD).
PFA investment in real estate jumped 50.66 per cent to N236.2 billion in H1 2022 from N156.8 billion in H1 2021.
Investment in private equity funds dipped 0.24 per cent to N38.87 billion from N38.96 billion.
PFA allocations to FGN securities was N9.01 trillion, a 2.67 per cent increase from N8.77 trillion in Q4 2021.
Investment in FGN securities accounted for about 63 per cent of total pension funds, which is likely to continue because of the rise in the interest rates of FGN Bonds and BN Treasury Bills, which have been recording oversubscriptions.
A major incentive is that FGN securities are safer than other variable assets, which most RSA funds are averse to.
RSA fund II accounted for most contributions with N6.24 trillion (43.7 per cent of total pension funds), followed by RSA Fund III with N3.86 trillion (27 per cent).
Existing schemes accounted for 10.1 per cent of total funds, increasing by N85.78 billion to N1.44 trillion. CPFAs accounted for 10.7 per cent at N1.52 trillion.
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PFAs ramp up investment in local stocks
PFAs increased their exposure in the local stock market in H1 2022 with an additional N53.85 billion investment that brought the total to N969.16 billion, per reporting by Nairametrics.
This followed the impressive H1 2022 of the Nigerian Exchange printing a 21.3 per cent gain in the All-Share Index between January and June 2022, attributed to bullish sentiments as many other investment portfolios dwindled.
Investment in foreign equities declined 18.44 per cent to N99.9 billion, the lowest level since March 2021, following the bearish performance of foreign stocks amid high global inflationary pressure.
But PFAs are now reducing investment in the local bourse, as investment allocated to the stock market dropped to N969.2 billion in June from N1 trillion in May.
Industry performed
PFAs clinched an average 5.02 per cent returns in H1 2022. RSA II Fund had the highest returns of 5.18 per cent in fund category, followed by RSA Fund I.
PFA leaders by average returns included PAL Pensions, Stanbic IBTC, and Leadway Pensure PFA.