Assets under the contributory pension scheme rose to N13.18 billion at the end of October last year from N12.3 billion in December 2020, according to data obtained from the National Pensions Commission.
PenCom, its latest unaudited pension fund industry portfolio report, said the total number of retirement savings accounts fell from 9,215,788 in December 2020 to 9,484,524 at the end of October 2021.
The traders invested 8.33 tn of funds in federal government securities, while the rest was invested in other portfolios such as domestic and foreign common stocks, corporate debt securities, local money market and mutual funds.
According to Agusto & Co, a pan-African credit rating agency, the net assets of the Nigerian pension sector are expected to reach the N20 billion mark by 2023.
It said in its 2021 Insurance Industry Report that growth in assets under management in the pension industry was largely driven by investment returns and additional contributions, to a lesser extent.
The rating agency noted that assets under management in the pensions sector stood at N12.3 billion as of December 31, 2020, representing a growth of 20.6% from N10.2 billion. reported at the end of 2019 and a compound annual growth rate of 18.3%. the last five years.
The report states that the sector’s annual contributions over the past five years averaged N699 billion, while withdrawals averaged about N341 billion, translating into a net annual contribution of N347 billion. naira and accounted for 26.6% of the sector’s assets under management growth during the period.
He said the remaining 73.4% of the average growth was attributable to investment returns made on the portfolios.
Agusto & Co said: “The pension transfer window opened on November 16, 2020 to allow holders of a retirement savings account to change pension fund administrators at most once a year and free of charge.
“By the end of the second quarter of 2021, over 25,600 RSA holders with pension assets above N102.5 billion would have changed PFAs.”
Competition is expected to intensify in the pensions industry as PFAs seek to attract new enrollees while retaining existing ones, the rating agency said, according to the report.
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