The recent report obtained from the National Pension Commission (PenCom) by Daily Independent has shown that the four Closed Pension Fund Administrators (CPFAs) operating within the industry contributed to the total pension Assets under Management (AuM) by 11.40percent or N2.66trillion as of March 2025.
The value of the industry pension fund assets as of 31 March, 2025, however, stood at ₦23.33 trillion. This represents an increase of N820 billion compared to N22.51 trillion reported as at 31 December 2024.
The growth, according to the Commission, was mainly due to additional contributions received and investment income (price appreciation of equities, interest income).
The PenCom in its recent report showing investment breakdown of Pension Assets as at 31 March 2025 indicates that the Pension Fund Assets were mainly invested in Federal Government Securities (FGN) which accounted for 62.09per cent of the total Pension Assets.
The report also indicates that Retirement Savings Account Funds I–1V accounted for N17.90 trillion or 76.73per cent, of the total pension assets, the existing Schemes accounted for N2.77 trillion or 11.87per cent while the Closed Pension Funds accounted for N2.66trillion or 11.40percent.
Majorly, these assets are invested in federal government securities which accounted for 62per cent of the total investments followed by domestic ordinary shares which accounted for 11.02percent, money market insurance accounted for 8.91percent.
With regards to the performance of the fund, the industry portfolio reported an annualised year-to-date performance of 19.29percent as of 1st quarter.
This has a lot of issues with regards to performance when you compare it with the inflation rate. (2:18) When you adjust it, you come to negative returns on the investment.
However, PenCom in collaboration with the financial sector in Africa is organising a workshop on investment in alternative assets for chairpersons of both investment committees and risk management committees of the board.
CPFAs are the licensed private pension fund administrators owned and run by the multinationals strictly for their employees.
They are Nestle Nigeria Trust CPFA Limited; Progress Trust CPFA Limited; Limited and the TotalEnergies EP Nigeria CPFA Limited.
Closed pension fund administrators are managers of Pension schemes in the private sector existing prior to the introduction of the Contributory Pension Scheme (CPS) in June, 2004 and were allowed to continue as CPFAs, subject to guidelines issued by PenCom.
The companies are required to have operated a fully funded existing pension scheme with assets of at least N500 million.
A condition precedent on the issuance of a CPFA license is that the company must possess the requisite capacity for the management of pension fund assets and show that it had managed its pension scheme effectively for at least five years prior to the commencement of the CPS.
The CPFAs operate mostly as Defined Benefits Schemes with a guarantee from the sponsor companies over any funding deficit.
The Pension Reform Act, 2014 has foreclosed new entrants into the CPFAs.
Commencing 1st July, 2014, all new employees of the sponsor companies are required to join the CPS and open Retirement Savings Accounts (RSAs) with a PFA of their choice.
Furthermore, an existing employee still reserves the right/option of pulling out of the CPFA to join the CPS.