Pension assets jump 22% to N26.7trn on higher contributions

Nigeria’s pension industry recorded a sharp expansion over the past year, with total assets under management rising by 22 percent to N26.7 trillion at the end of October.

The expansion was driven by strong market performance, increased contribution inflows, and broader diversification across asset classes, according to analysts at the Pension Fund Operators Association of Nigeria (PenOp).

Investment in domestic ordinary shares increased by 82.0 percent, from N2.11 trillion to N3.84 trillion, indicating sustained confidence in equity markets and long-term growth assets.

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Holdings in FGN Securities recorded the highest growth among traditional assets, expanding by 17.6 percent, rising from N13.57 trillion to N15.96 trillion, as pension funds increased exposure to government backed instruments.

Allocations to money market instruments grew by 30.9 percent, increasing from N2.20 trillion to N2.88 trillion, reflecting higher liquidity positioning amid attractive short-term yields, the analysts said.

Mutual Fund investments more than doubled, recording a 107.6 percent growth, from N106.85 billion to N221.86 billion, highlighting rising pension participation in long-term national development projects.

Investment in infrastructure funds rose by 48.1 percent, increasing from N177.24 billion to N262.57 billion, underscoring growing diversification through pooled investment vehicles.

Similarly, private equity investments expanded by 89.5 percent, from N123.04 billion to N233.10 billion, reflecting increased appetite for alternative assets and long-term value creation.

Overall, the period showed robust pension fund growth across both traditional and alternative asset classes, reinforcing the sector’s expanding role in capital market development and economic growth, PenOp said.

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PenCom, in its third-quarter report on the performance of the industry, noted that reform momentum has driven stability, growth, and confidence in Nigeria’s pension system.

The Commission said, “The third quarter of 2025 marked a period of resilience and reform driven progress for Nigeria’s pension industry.

“Supported by macroeconomic stability, rising capital market confidence, and deepening regulatory oversight, PenCom consolidated gains across fund performance, compliance, and coverage,” the regulator said

It noted that total pension assets grew to N26.09 trillion, while industry reforms continued to enhance transparency, accountability, and public trust in the Contributory Pension Scheme (CPS).

According to the Commission, coverage expanded with over 129,154 new Retirement Savings Account (RSA) registrations, supported by increased youth participation and improved gender inclusion.

“Gender inclusion improved, with female registrations rising to 40.3 percent, narrowing the gender gap by 6.5 percent year-on-year.”

Retirement benefit administration remained stable, with timely payment of accrued rights and enhanced service delivery under the DBS.

Compliance enforcement strengthened through recoveries, employer monitoring, and continued state-level CPS adoption engagements.

Total pension contributions in the third quarter (Q3) of 2025 stood at N503.19 billion, reflecting strong remittance compliance across public and private sectors.

Private sector contributions increased by 67.30 percent, rising to N338.65 billion from N202.47 billion in the second quarter (Q2) of 2025.

Public sector contributions totalled N164.54 billion, moderating from N223.95 billion in Q2 2025 due to seasonal fiscal disbursements.

A total of N34.64 billion in accrued pension rights was paid to 9,707 retirees and deceased employees, demonstrating the Federal Government’s sustained commitment to legacy liabilities.

At the end of Q3 as well, 5,950 electronic Pension Clearance Certificates (e-PCCs) were issued to compliant employers, covering N34.34 billion in contributions for 64,457 employees, while N2.07 billion was recovered from 49 defaulting employers, bringing total recoveries since 2012 to N32.27 billion.

“These outcomes underscore PenCom’s consistent enforcement of compliance, efficient fund management, and commitment to protecting contributors’ interests,” the Commission said.

Modestus Anaesoronye is a leading Nigerian financial journalist with over two decades of experience reporting on the insurance and pension sectors across Nigeria and West Africa. He has held key editorial positions at major national media outlets, including The Comet, The Nation, and Financial Standard, and currently serves as a Senior Financial Analyst at BusinessDay Media Ltd.

A widely travelled reporter, he has covered industry developments in more than 14 countries across Africa and Asia.

Anaesoronye is a multiple award-winning journalist, honoured several times as Insurance Journalist of the Year and Pension Journalist of the Year by recognised industry bodies, including PensionScope and the Pension Fund Operators Association of Nigeria (PenOp), among others.

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