Nigeria’s pension industry continued its steady upward trajectory in May 2025, as total pension fund assets surged to N24.10 trillion, marking a 1.91 percent increase from the N23.65 trillion recorded in April.
This rise, according to the latest data released by the National Pension Commission (PenCom), reflects a combination of new Retirement Savings Account (RSA) enrollments, solid investment performance, and deliberate portfolio shifts across fixed-income and alternative assets — even amid persistent economic headwinds.
Federal Government of Nigeria (FGN) securities remained the bedrock of pension fund allocations, climbing 2.04 percent month-on-month to ₦14.95 trillion. These instruments represented 62.06 percent of total pension fund assets as of May, underscoring fund managers’ continued preference for sovereign-backed instruments in a risk-sensitive environment.
A closer breakdown reveals that FGN Bonds (Held-to-Maturity) grew by 1.73 percent to N12.67 trillion, consolidating their dominance as the largest asset class and accounting for 52.56 percent of the total Net Asset Value (NAV). Treasury Bills, increasingly attractive in light of interest rate adjustments, recorded a notable 5.15 percent uptick to N604.59 billion.
However, performance across other sovereign instruments was mixed. Green Bonds edged up slightly by 0.74 percent to N2.32 billion, while Agency Bonds and Sukuk Bonds declined sharply by 14.66 percent and 10.31 percent, respectively — an indication of declining appetite for these fixed-income segments. State Government Securities also dipped by 3.07 percent, highlighting ongoing concerns about subnational creditworthiness.
Investments in Corporate Debt Securities slipped by 0.98 percent to ₦2.29 trillion, now making up 9.51 percent of total NAV. In contrast, the money market segment recorded its strongest monthly growth yet, expanding by 6.07 percent to ₦2.31 trillion.
Within the money market space: Fixed deposits and bank acceptances surged 7.58 percent to N1.96 trillion; Commercial papers, typically used for short-term corporate funding, fell 6.78 percent to ₦257.67 billion, signalling a weakening in corporate short-term borrowing appetite, while Foreign money market Instruments jumped 19.22 percent to N68.97 billion, the most notable percentage gain across all asset classes in the month.
On the equities front, domestic stocks rebounded impressively, rising 6.78 percent to N2.75 trillion. This increase, which now places domestic equities at 11.40 percent of total NAV, highlights improved investor sentiment on the Nigerian Exchange. Likewise, foreign equities gained 4.67 percent to ₦290 billion — pointing to cautious but growing diversification into international markets.
Mutual funds expanded 2.13 percent to N183.99 billion, largely driven by a 2.93 percent increase in Open/Close-End Fund investments.
Exposure to other alternative assets remained on a steady upward path: Supra-national bonds rose by 2.12 percent; Private equity holdings increased by 0.55 percent; Infrastructure funds, while only slightly up by 0.36 percent, stood at N229.88 billion, reinforcing continued interest in long-term developmental assets and Real Estate Investment Trusts (REITs) also advanced by 1.15 percent.
On the other hand, cash and other assets experienced a sharp decline of 30.88 percent — an indication that PFAs are accelerating the redeployment of idle cash into income-generating investments, likely to hedge against inflationary erosion and maximize portfolio efficiency.
RSA registrations, fund structure insights
Nigeria’s pension sector also recorded consistent growth in RSA participation. According to the Commission, as of May 2025 the total number of Retirement Savings Account holders climbed to 10.76 million, up from 10.72 million in April. This incremental growth reflects sustained onboarding of employees under the Contributory Pension Scheme, despite economic challenges.
Fund distribution by asset class reveals continued dominance of Fund II, the default RSA fund for active contributors below 49 years of age. With ₦10.04 trillion in assets, Fund II holds a 41.65 percent share of total pension assets.
Other fund performance metrics include:
Fund III rose to ₦6.32 trillion, accounting for 26.24 percent of total assets.
Fund IV (Retiree Fund) maintained a solid footing with ₦1.79 trillion or 7.42 percent of NAV, reflecting the lower risk appetite of pensioners.
Fund I, designed for aggressive investors under 49, grew 4.73 percent to N319.34 billion — indicating a slow but rising risk tolerance among younger contributors.
Fund V (Micro Pension Fund), aimed at the informal sector, posted a modest gain to N1.41 billion, securing a small but essential 0.04 percent share of the market.
Beyond the traditional RSA funds, Closed Pension Fund Administrators (CPFAs) and Approved Existing Schemes (AES) held significant assets. CPFAs accounted for N2.62 trillion (10.80 percent of NAV), while AES schemes controlled N2.85 trillion (11.81 percent), reaffirming their relevance in Nigeria’s broader pension ecosystem.
