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Thursday, March 30, 2023

ARM Pensions’ Return on Funds Exceeds Industry Average, Posts N3.63 bn profit

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ARM Pensions Limited has continued to make a huge mark in terms of returns on the funds under its management, particularly Retirement Savings Account (RSA) Fund II and Fund III.

ARM Pensions recorded a pension fund return of 7.70 percent, 9.10 percent, and 8.90 percent, on RSA Fund I, II, and III, which outperforms the industry average of 4.91 percent, 5.17 percent, and 4.88 percent on Funds I,II,III.

Of course, the impressive results means the company is taking advantage of the country’s rapidly growing population and transformation policies to magnify asset under management (AUM).

There has been an inflow of liquidity into the pension industry that makes the allure of banks who are making inroads into the sector with mergers and acquisition strategies.

Analysts say there are immense opportunity in the industry because of the country’s favorable demographics as the young population is contributing to the sector

At the end of 2021, 6.95 million contributors or 73 percent of the total number of contributors in the pension scheme were below 40 years, according to data compiled by Chapel Hill Denham Limited.

“This, in our view, indicates that PFAs should take long-term investment positions in equities, particularly for the young generation to generate substantial returns for them in the long term,” said the analysts.

The number of RSA holders grew at a CAGR of 13 percent between  2006 and 2021 to stand at 9.53mn at end of 2021 and has further  improved to 9.79 million as at 30 June 2022, according to data from Chapel Hill Denham.

According to the audited financial statement of the pension fund administrator, it posted net income of N3.62 billion in December 2021 which is 5.48 percent lower than 2020’s N3.42 billion.

Return on equity (ROE) reduced to 34.90 percent in December 2021 from 37.90 percent the previous year.

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