Data released by the National Pension Commission (Pencom) showed that pension fund assets increased by 25.28% in 2020 from the year’s opening figure of N9.81 trillion to N12.29 trillion by December 31, 2020.
The report showed that the number of Retirement Savings Account (RSA) holders by the end of 2020 stood at 9.22 million.
A breakdown of the pension funds investment distribution showed continued concentration in Nigeria’s sovereign issues. Pension Fund Administrators (PFAs) invested N8.13 trillion in Federal Government’s securities, representing about 66.2 per cent of total pension fund assets.
Other asset classes included domestic ordinary shares, N858.46 billion; foreign ordinary shares, N92.92 billion; state government securities, N136.59 billion; corporate debt securities, N836.34 billion; local money market securities, N1.69 trillion; foreign money market, N18.69 billion; infrastructure funds, N66.43 billion; bank placements, N1.53 trillion; commercial papers, N156.69 billion and cash and other assets accounted for N122.79 billion.
Further segmentation of the funds invested in government’s sovereign securities showed that N6.83 trillion was invested in bonds, N628.11 billion was invested in Nigerian Treasury Bills (NTBs), N9.49 billion was invested in agency bonds, N646.93 billion was invested in alternative Sukuk while N13.05 billion was invested in green bonds.
Pension funds managers, which had invested heavily on government and money market securities, had faced a major test in 2020 as returns on fixed-income assets melted. Conversely, the Nigerian equities, which account for less than seven per cent of total pension assets, recorded a world-leading positive return of 50.03 per cent.