Nigeria’s Pension Industry Gains N3.36 trillion in 2023, Fastest Growth on Record

Nigeria’s pension industry gains N3.36 trillion in 2023, fastest growth on record

Impressive Surge: Nigeria’s Pension Industry Experiences Record N3.36 Trillion Growth in 2023.


In a groundbreaking development, Nigeria’s pension sector witnessed an unprecedented surge, with total pension assets soaring by an impressive N3.36 trillion in 2023. The year concluded with a record high of N18.36 trillion, marking a remarkable 22.43% year-on-year increase—the fastest growth ever recorded.

This notable achievement is highlighted in the unaudited report on pension fund portfolios released by the National Pension Commission (PenCom). Additionally, the total number of Registered Retirement Savings Account (RSA) registrations reached 10.19 million by the end of December 2023, showcasing a 3.3% increase from the previous year’s 9.86 million.

Portfolio Allocation

Examining the portfolio breakdown, federal government securities dominated with N11.92 trillion, constituting 64.9% of the total assets. This allocation aligns with PenCom regulations, emphasizing investments in secure, fixed assets such as FGN bonds and treasury bills.

Corporate debt securities accounted for N1.91 trillion (10.2% of assets), while the Nigerian equities market contributed N1.57 trillion (8.6% of assets). Money market instruments held N1.67 trillion, making up 9.1% of the total pension assets.

Breaking down the fund categories, Fund II remained dominant with a total asset value of N7.8 trillion, representing 42.5% of the funds. This default fund for contributors below the age of 49 allows PFAs a 55% portfolio allocation in variable instruments. Fund III followed with N4.94 trillion, while Fund V recorded the least amount at N731.4 million.

Pension Industry Growth

The Nigerian pension industry has experienced significant growth in recent years, reflected in its increasing penetration rate. Over the past five years, industry asset value has more than doubled, thanks to various reforms shaping the sector.

Key policies, such as the minimum regulatory capital requirement for Pension Fund Administrators (PFAs) increased from N1 billion to N5 billion, triggered a wave of mergers and acquisitions. Before the 2021 recapitalization, there were 22 PFAs, but the number reduced to approximately 19 post-implementation, with more mergers expected in 2024.

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Restructuring of major commercial banks into holding companies with diversified interests in the pensions industry stimulated enhanced competition. New entrants like Access Pensions, Norrenberger Pensions, GT Pensions, and Tangerine have contributed to increased industry growth through market efficiency and profitability.

Access Holdings recently announced regulatory approval for its subsidiary, Access Golf Nigeria, to acquire a majority stake in ARM Pension Managers, a move that could further consolidate the industry.

Notable Trends

A recent Nairametrics article reveals that 101,820 RSA holders switched their Pension Fund Administrators in 2023—a 10.2% increase compared to the previous year and the highest on record. Transfers amounted to N462 billion, a 28% rise from the previous year, bringing the total since the inception of the transfer window to N1.14 trillion.

This transfer activity aligns with section 13 of the Pension Reform Act (PRA) 2024, allowing RSA holders to move their accounts between PFAs.

In conclusion, Nigeria’s pension industry continues to experience robust growth, marked by impressive asset increases, strategic reforms, and emerging trends shaping the landscape.

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