Growth in pension assets dropped to a 12-month low of N61.9 billion at the end of March 2025 due to outflows.
After a recovery in May 2024 from a negative position in March 2024, pension assets growth remained in an upward trend despite market fluctuations until March 2025’s sharp drop.
The drop, according to analysts, in the pension industry was due to outflows from approved existing schemes.
Existing schemes, according to the National Pension Commission (PenCom) guidelines, include: staff retirement benefit funds, retirees’ funds, gratuity funds and any other form of compensation fund put in place by employers.
Read also: We have committed over N40bn to offset salary, pension – Otti
A chief investment officer in one of the Pension Fund Administrators (PFAs), who would not want his name mentioned, said: “The drop could be linked to approved existing schemes (AES) because they make payments to beneficiaries.”
“It’s possible some AES schemes had large outflows during the period,” he said.
Data from PenCom) show negative results in existing schemes, which dropped from N2.84 trillion in February to N2.77 trillion in March.
Within the one-year period, pension asset growth of N256.8 billion was recorded in July 2024; N304.9 billion in August; N345.7 billion in September; N244.7 billion in October; N541.0 billion in November, and N254.5 billion in December. The assets stood at N349.3 billion in January and N405.3 billion in February.
Oguche Agudah, chief executive officer, Pension Fund Operators Association of Nigeria (PenOp), commenting on a drop in the growth of pension assets, said some previously existing schemes have recently been contracted to PFAs to manage.
According to him, many of those assets were moved into RSA accounts instead of being transferred wholesale for PFAs during the first quarter (Q1) of 2025.
“That could explain the jump in RSA assets side by side with the drop in value of existing schemes in March,” he noted.
“Additionally, we saw an increase in investments in corporate debt securities and domestic ordinary shares during that period, which also contributed to asset growth,” Agudah said.
Read also: Pensions unbundled: What the new PenCom directive means for HR strategy and leadership
Michael Oyebola, an analyst at Money Counsellors, said pension fund assets’ growth usually drops at the end of every March.
Oyebola said, “I cannot be categorically sure what happened, but it looks like an outflow for benefits approved by employers and PFAs during the end of the year and early January are paid out, and it reflects in the month of March.”
He also noted that investment allocations to money market instruments like treasury bills and cash balances also dropped, meaning that such liquid assets might have been converted to cash for payment of benefits.
At the end of March 2025, total pension asset net value stood at N23.33 trillion, as against N23.27 trillion in February, indicating a growth of N61.91 billion, while the number of registered RSA holders stood at N10,689,846.
Assets growth, investments
While reviewing the performance of the industry over a four-month period, between December 2024 and March 2025, analysts at PenOp said Nigeria’s pension fund assets experienced notable growth across most asset classes.
Equity investments increased from N2.51 trillion to N2.83 trillion, indicating growing confidence in the stock market. FGN securities, which continue to dominate the portfolio due to their perceived safety, also rose from N14.11 trillion to N14.48 trillion over the period. Corporate debt securities saw a modest rise from N2.25 trillion to N2.35 trillion, showing steady interest in private sector instruments.
Read also: Industrial Court upholds employee rights to sue over unremitted pensions
“One of the most significant jumps was in mutual funds, which more than doubled from N80.78 billion to N154.05 billion. This suggests that pension fund administrators are increasingly exploring collective investment schemes for diversification and potential returns. Additionally, cash and other liquid assets grew from N427.84 billion to N502.29 billion, pointing to improved liquidity or a strategy to remain flexible in response to market changes.”
PenOp said the growth across these asset classes reflects cautious optimism and strategic diversification by pension fund managers.
“It also highlights an ongoing shift towards a more balanced investment approach, influenced by market reforms and a search for better yields.”
