The National Pension Commission (PenCom) said the total number of retirement savings account (RSA) holders in the country has increased to 10.19 million as of the end of December 2023.
This, the commission revealed, reflects a 3.3 per cent increase from 9.86 million registered as at the end of 2022.
According to data from the commission, the total pension asset in the country gained N3.36 trillion in 2023, closing the year at a record high of N18.36 trillion from N14.99 trillion recorded as of the previous year.
This represents a year-on-year increase of 22.43 per cent, which is the fastest growth on record.
A breakdown of the portfolio showed that investments in federal government securities (N11.92 trillion) accounted for 64.9 per cent of the total assets, which is in line with the commission to invest most of the contributions in less risky assets like federal government bonds and treasury bills.
Additionally, corporate debt securities (N1.91 trillion) accounted for 10.2 per cent of the assets, while investments in the equities market (N1.57 trillion) contributed 8.6 per cent to the total assets.
A total of N1.67 trillion was invested in money market instruments as of the end of the year, accounting for 9.1 per cent of the total pension assets.
In terms of breakdown by fund category, Fund II continues to dominate with a total asset value of N7.8 trillion, accounting for 42.5 per cent of the funds. This is the default fund for contributors below the age of 49 years as it allows Pension Fund Administrators 55 per cent of the portfolio in variable instruments.
Fund III followed with a total portfolio of N4.94 trillion, while Fund V recorded the least amount of N731.4 million.
The Nigerian pension industry has recorded significant strides in recent years, as represented in its growing penetration rate. In the last five years, the industry asset value has doubled, following several reforms that continue to shape the industry.
The commission said one of such policies that shaped the industry includes the increment of the minimum regulatory capital requirement for PFAs from N1 billion to N5 billion, triggering a series of mergers and acquisitions in the industry.
A move that was aimed at fortifying the financial capacity of the pension administrators.
Recall that before the recapitalisation in 2021, there were 22 PFAs, however following the implementation, the number of players reduced to about 19, with more anticipated mergers in 2024.
Also, the restructuring of some major commercial banks into Holding companies, with diversified interest in the pensions industry spurred improved competition in the industry.
