Business a.m.

The National Pension Commission (PenCom) has reported that Nigeria’s pension fund industry maintained its upward trajectory in June 2025, with total assets under management rising to N24.63 trillion. This marks a 2.17 percent growth from the N24.11 trillion recorded in May 2025.

The update was contained in the monthly summary of the pension funds industry for June 2025, recently released by PenCom, offering insight into how the industry performed across various asset classes.

According to the report, domestic ordinary shares recorded a significant boost, rising by N333.05 billion or 12.12 percent month-on-month to N3.08 trillion, contributing 12.5 percent to the total assets under management. Foreign ordinary shares also edged up slightly by 0.95 percent to N292.78 billion, indicating cautious optimism in global markets amid persistent macroeconomic uncertainties.

The Federal Government of Nigeria (FGN) securities maintained their dominance, accounting for over 61 percent of total pension assets. The asset class grew by N232.96 billion or 1.56 percent to reach N15.19 trillion in June. 

Within this category, FGN Bonds (HTM) rose moderately by 0.91 percent to N12.79 trillion, contributing a significant 51.9 percent to the total asset portfolio. Treasury Bills increased by 3.24 percent to N624.15 billion, while Green Bonds surged by 361.15 percent to N10.71 billion, up from N2.32 billion the previous month. Sukuk Bonds also recorded a modest 3.21 percent increase to N89.64 billion.

Despite the decline of Agency Bonds by 5.50 percent, the broad FGN securities category remains the most trusted and liquid investment channel for pension funds.

Corporate debt securities experienced a general decline of 1.26 percent, dropping to N2.26 trillion. All subcategories within the corporate debt segment posted negative returns, with Corporate Bonds (HTM) declining by 1.02 percent, Corporate Infrastructure Bonds by 1.48 percent, and Corporate Bonds (AFS) falling the most, by 1.86 percent. Nonetheless, corporate debt continues to represent 9.19 percent of total pension assets, reflecting a moderate but cautious allocation to the private sector.

The pension industry’s money market investments dipped by 3.16 percent to N2.24 trillion as Pension Fund Administrators (PFAs) reallocated funds toward higher-yielding assets. Fixed deposits declined by 7.10 percent. In contrast, Commercial Papers rose sharply by 32.98 percent to N342.65 billion, indicating a shift towards short-term debt instruments. Meanwhile, foreign money market instruments fell steeply by 24.69 percent, marking the sharpest decline in the overall portfolio.

Mutual Funds dipped slightly by 0.10 percent to N183.82 billion, reflecting a cautious stance by PFAs in that category. Open/Close-End Funds dropped by 1.83 percent, while Supra-national Bonds inched up by 0.09 percent.

Real Estate investments declined by 6.83 percent to N255.94 billion, attributed to asset revaluation. In contrast, Infrastructure Funds increased by 5.62 percent, indicating renewed appetite for long-term developmental investments. Real Estate Investment Trusts (REITs) also recorded a modest increase of 2.23 percent.

The analysis further revealed a sharp 21.35 percent rise in cash and other assets, which grew to N394.18 billion in June from N324.84 billion in May.

On fund performance by category across RSA funds and legacy schemes, Fund II, the most popular fund for active contributors, surged by 2.57 percent from N10.04 trillion to N10.3 trillion. It accounted for over 41 percent of total pension assets, indicating strong inflows and robust investment returns.

Fund III, designed for older contributors, recorded a 1.17 percent increase to N6.4 trillion, contributing 25.98 percent to the total asset portfolio. Fund I grew by 3.21 percent to N329.6 billion, while Fund IV rose by 2.14 percent, reflecting the conservative nature of that portfolio. Fund V and Fund VI, which cater to micro-pension contributors, posted moderate growths of 3.86 percent and 2.90 percent, respectively.

Existing Schemes and Closed Pension Fund Administrators (CPFAs) contributed 12.08 percent and 10.7 percent to the total asset pool, respectively, further reinforcing the broad-based growth across both legacy and institutional schemes.

The data also showed that the number of Retirement Savings Account (RSA) holders increased from 10.76 million in May to 10.80 million in June 2025.