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Thursday, August 18, 2022

Nigeria’s Public Pension Contributions Eclipse Private Sector for Second Straight Year

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Contributions into Nigeria’s Pension scheme was led by the public sector for the second straight year according to regulatory (PenCom) data seen by MoneyCentral.

The total pension contributions remitted to individual retirement savings accounts (RSAs) in Q3 2021 stood at N272.15 billion.

Out of this total, the public sector remittance accounted for N170.96 billion or 62.82%, while the private sector contributed N101.19 billion or 37.18%.

In 2020, the public sector remittance was N536.97 billion, while the private sector contributed N371.12 billion.

The data shows that from 2004 – 2013, the public sector was the major driver of Pensions contributions and growth. However from 2014 – 2019 the private sector took over as the growth river. In 2020 the public sector contributions returned to powering the pensions industry largely as a result of the coronavirus epidemic.

The aggregate pension contributions of the public sector (since inception in 2004) increased from N3.65 trillion to N3.82 trillion as at the end of Q3 2021. Similarly, the aggregate pension contributions of the private sector also increased from N3.46 trillion to N3.56 trillion as at the end of Q3 2021. (See table)

The cumulative pension contributions from inception to the end of the third quarter of 2021 amounted to N7.37 trillion, which is an increase from N7.10 trillion as at the end of Q2 2021.

In the Micro Pension space, nineteen (19) PFAs had registered 2,179 contributors during the quarter under review.

This brought the total number of Micro Pension contributors to 71,434 as at 30 September 2021. Similarly, the sum of N24,844,757.61 was credited into the RSAs of 7,720 Micro Pension Plan (MPP) Contributors in Q3 2021, bringing the total value of the Micro Pension Fund to N196,644,122.96 as at 30 September 2021.

The total value of Pension Fund assets as at 30 September 2021 was N13 trillion.

The amount comprised of N9.14 trillion in RSA’ Active’ Funds (i.e., RSA Funds I, II III and V); N1.05 trillion in RSA Retiree Fund; N1.48 trillion in CPFAs; N1.31 trillion in Approved Existing Schemes (AES) Funds and N7.80 billion for RSA Fund VI, Active and Retiree.

Pension Fund Assets were mainly invested in Federal Government Securities (FGN), accounting for 63.25% of total assets. The composition of investments in FGN Securities were as follows: FGN Bonds: 92.20%; Treasury Bills: 3.45%; and Agency Bonds, Sukuk and Green Bonds accounted for 1.29%.

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