Nigeria’s total pension assets rise by 7.36% to N11.09trn in Q2 2020

The total value of Pension Fund Assets (PFAs) standing on unaudited valuation reports rose from N10.33 trillion as at March 2020 to N11.09 trillion as at end of Q2 2020. The growth, which is mainly due to market valuation of quoted equities, represents 7.36 per cent on a quarter on quarter comparison, a recent report from the Nigerian Pension Commission (PenCom) shows.

According to the report accessed by Business A.M., the total monthly pension contributions received from both the public and private sectors contributors was N6.19 trillion as at the end of June 2020. This shows an increase of N189.19 billion (or 3.15% growth) over the total contributions as at the end of March 2020. Meanwhile, in the second quarter of 2020, the total contributions received from the public sector rose to N118.50 billion (62.64%) while the private sector put in N70.69 billion (37.36%) into the fund.

Further analysis of the aggregate contribution received shows that N3.13 trillion or 50.58 per cent of the funds came from the public sector, while the private sector contributed the remaining 49.42 per cent or N3.06 trillion. Also, the aggregate total pension contributions of the private sector improved from N2.99 trillion as at first quarter 2020 to N3.06 trillion as at the end of June signalling a 2.37 per cent growth, while the aggregate total pension contribution of the public sector surged 3.93 per cent from N3.01 trillion to N3.13 trillion over the same period.

A collapse of the industry portfolio shows that the pension funds were mainly invested in Federal Government Securities, with an allocation of about 67 per cent of the total pension assets (FGN Bonds: 57%, Treasury Bills: 9%, Sukuk Bonds: 1% while Agency Bonds and Green Bonds: less than 1%) during the period under review.

Still on investment in security, the value of investments in FGN Bonds increased by N706.41 billion (12.60%), FGN Sukuk by N27.43 billion and Agency Bonds by N0.52 billion, on the flip, investments in Treasury Bills decreased by N297.53 billion (22.58%) owing to value reduction in T-bills, which was largely due to maturities and reallocation to other asset classes, mainly FGN Bonds and other Money Market Securities.

Furthermore, the pension quarterly report also revealed that the Net Asset Value of the RSA Retiree Fund increased by N58.53 billion (7.07%), from N827.93 billion by end of March 2020 to N886.47 billion by close of June 2020. Looking at withdrawal during the quarter under review, the sum of N15.44 billion was approved for payment as lump sum and N215.57 million as monthly programmed withdrawals to 4,684 retirees.

Also, PenCom approved a total of 1,382 applications for retirement under life annuity during the quarter. The 1,382 retirees received N4.41 billion as a lump sum payment and paid a premium of N9.80 billion to insurance companies in exchange for monthly annuity of N89.33 million.

Also in the quarter ended June, withdrawal of 25 per cent of RSA balances approval was granted for payment of N2.56 billion to 4,668 RSA holders who were under the age of 50 years and were disengaged from work but unable to secure another job within 4 months of disengagement during the second quarter.

Meanwhile, the Commission approved the payment of N2.58 billion as death benefits to the beneficiaries of the 591 deceased employees during the quarter under review. Similarly, the report also revealed that the pension industry recorded a 0.45 per cent growth (41,074) in the membership scheme during the second quarter of 2020, moving from 9.06 million contributors at the end of the preceding quarter to 9.10 million.

However, the industry membership growth was largely driven by the Retirement Savings Account (RSA) Scheme, which had an increase of 41,147 contributors representing 0.46 per cent.