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Tag: Pension funds

  • Govt moves to unlock N23tr Pension Funds for development

    Govt moves to unlock N23tr Pension Funds for development

    The Federal Government has called for the strategic deployment of the N23 trillion pension assets to advance key sectors of the economy and speed up development.

    Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, made the call at the weekend at this year’s Pension Industry Leadership Retreat in Lagos.

    The event, titled: “Sustainable retirement: Strategic blueprint for economic development and inclusion,” brought together stakeholders across the financial and pension sectors.

    Edun, who described the pension industry as a major driver of long-term economic growth, said: “With pension assets now accounting for about 8.6 per cent of the Gross Domestic Product (GDP), there is a significant opportunity to align these funds with the country’s strategic priorities, including infrastructure development, affordable housing, energy access, and digital transformation.

    “We must harness the transformative power of pension funds to support sustainable growth – without compromising the security of retirees’ savings.”

    Recognising the success of the Contributory Pension Scheme (CPS), which has grown into one of the most robust savings platforms in Africa, the minister observed that the country still falls short when compared to global benchmarks for pension penetration.

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    He urged stakeholders in the industry to explore safe, well-regulated investment vehicles that deliver both impact and steady returns.

    Citing recent macroeconomic indicators, Edun referenced the 3.84 per cent GDP growth recorded in the first quarter of 2025, as well as improvements in foreign reserves and exchange rate stability.

    Despite these gains, the minister noted that the pace of growth has remained insufficient to make a significant dent in poverty levels.

    “To reduce poverty and create meaningful opportunities, we need to achieve a growth rate of at least seven per cent annually.

    “Currently, the national budget accounts for just 10 percent of GDP. This means institutional investors like pension funds must play a more prominent role in financing the real sector,” he added.

    The minister confirmed President Bola Ahmed Tinubu’s commitment to fostering an inclusive and resilient financial system capable of meeting the country’s long-term development goals.

    A statement from ministry further stated that the government is eager to collaborate with industry players to unlock the full economic potential of pension assets.

    “By strategically deploying pension assets, Nigeria can unlock new opportunities for economic growth, job creation, and improved living standards.”

  • FG moves to unlock N23tn pension funds for national development

    FG moves to unlock N23tn pension funds for national development

    The federal government has called for the strategic deployment of Nigeria’s pension assets, now valued at over N23 trillion, to advance key sectors of the economy and accelerate national development.

    Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, made the call over the weekend at the 2025 Pension Industry Leadership Retreat held in Lagos. 

    The event, themed “Sustainable Retirement, Strategic Blueprint for Economic Development and Inclusion,” brought together stakeholders across the financial and pension sectors.

    Speaking at the retreat, Mr. Edun described the pension industry as a major driver of long-term economic growth. He noted that with pension assets now accounting for about 8.6 percent of Nigeria’s Gross Domestic Product (GDP), there is a significant opportunity to align these funds with the country’s strategic priorities, including infrastructure development, affordable housing, energy access, and digital transformation.

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    “We must harness the transformative power of pension funds to support sustainable growth—without compromising the security of retirees’ savings,” the minister stated.

    While recognizing the success of Nigeria’s Contributory Pension Scheme (CPS), which has grown into one of the most robust savings platforms in Africa, Mr. Edun observed that the country still falls short when compared to global benchmarks for pension penetration. 

    He called on industry stakeholders to explore safe, well-regulated investment vehicles that deliver both impact and steady returns.

    Citing recent macroeconomic indicators, Edun referenced the 3.84 percent GDP growth recorded in the first quarter of 2025, as well as improvements in foreign reserves and exchange rate stability. Despite these gains, he pointed out that the pace of growth remains insufficient to make a significant dent in poverty levels.

    “To reduce poverty and create meaningful opportunities, we need to achieve a growth rate of at least 7 percent annually,” he said. “Currently, the national budget accounts for just 10 percent of GDP. This means institutional investors like pension funds must play a more prominent role in financing the real sector.”

    The Minister said President Bola Ahmed Tinubu remains committed to fostering an inclusive and resilient financial system capable of meeting the country’s long-term development goals. 

    A statement issued by the Federal Ministry of Finance on Sunday further stated that the government is eager to collaborate with industry players to unlock the full economic potential of pension assets. 

    “By strategically deploying pension assets, Nigeria can unlock new opportunities for economic growth, job creation, and improved living standards,” the statement read.

  • FG denies alleged plans to access Pension Funds

    FG denies alleged plans to access Pension Funds

    The Federal Government has denied reports that it planned to access to pension contributions for infrastructure development. 

    The Minister of Finance and Coordinating Minister for the Economy Wale Edun, in a statement, assured Nigerians their “hard-earned savings and pension funds are safe”.

    The Minister emphasised the stringent regulations governing the pension industry. 

    He noted: “There are rules and well laid out limitations about what pension fund assets can be invested in, and what it cannot be invested in.”  These regulations serve as safeguards to  “protect the pensions of workers.”

    Edun clarified the purpose of a recent announcement at the Federal Executive Council (FEC) meeting. 

    He stressed that the announcement was purely informational and did not seek approval for any action. 

    The purpose was to initiate a collaborative effort  “drawing in all the major stakeholders in the long term savings industry.” 

    This initiative aims to explore innovative ways,  “within the rules and regulations set by the law,” to maximize the impact of long-term savings on the economy.

    The Minister outlined potential benefits of this collaborative effort. 

    He emphasised the desire to  “drive investment in key growth areas including infrastructure, housing,” and facilitate  “affordable mortgages” for Nigerians. 

    He reiterated that  “there is no attempt, nor is it being considered to offer unsafe investments for pension funds.” 

    The overarching goal is to  “boost growth in the economy” without compromising the security of pension funds.

    The statement acknowledged the government’s capacity to  “provide guarantees where stocks are needed in order to unlock funding that will lead to growth, creation of jobs and alleviation of poverty.” 

    Edun framed the initiative as a collaborative challenge  “for the best and the brightest in the financial industry to come up with solutions” that  “safeguard the long-term savings” while also promoting economic growth.

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    The Nigerian Pension Act does not allow for the Federal Government to directly access money from the pension fund to finance infrastructure projects.

    The pension funds are managed by Pension Fund Administrators (PFAs) and held in trust for contributors to the pension scheme. These funds are meant to be invested to generate returns and provide retirement benefits to contributors.

    However, the Pension Reform Act of 2014 allows for the investment of a portion of the pension funds in infrastructure projects. Section 86(1) of the Act provides guidelines for the investment of pension funds in various instruments, including infrastructure funds.

    This provision allows Pension Fund Administrators (PFAs) to invest a portion of the pension funds in infrastructure projects through infrastructure bonds, funds, and other vehicles approved by the National Pension Commission (PenCom).

    In this way, the pension funds indirectly support infrastructure development in the country by investing in infrastructure projects that have been vetted and approved by the regulatory authorities.

    This ensures that the pension funds are prudently managed and invested while also contributing to the development of critical infrastructure in Nigeria.

  • Pension funds’ assets decline  by N90b

    Pension funds’ assets decline  by N90b

    Pension fund assets have witnessed a decline in March,  this year, due to exchange rate pressures, The Nation has learnt.

    The net asset value of the fund drop to N19.669 trillion from N19.759 trillion recorded in the previous net asset value, falling by N90 billion.

    This was shown in the National Pension Commission (PenCom) Unaudited Report on Pension Funds Industry Portfolio for the Period Ended 31 March released on April 25.

    Findings by the newspaper showed that the fund declined during the period under review because of the reduction in the revaluation gains made by Closed Pension Fund Operators (CPFAs).

    This was done as a result of the appreciation of the naira relative to the dollar in March, PenCom Director, Corporate Communications, Ibrahim Buwai, said.

    Notwithstanding the fall, the Contributory Pension Scheme (CPS) under which the fund is established recorded more contributors with Retirement Savings Account (RSA) Membership growing to 10,280,956 in March from 10,258,611 in February.

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    Meanwhile, before March, the pension sector has been witnessing growth and participation in the scheme despite rising inflation rate that has plagued the domestic economy.

    Director-General, PenCom, Mrs Aisha Dahir-Umar in the Quarter 3, 2023 report said registration into the scheme increased by 59.52 per cent to 93,633 in Q3, 2023 from 63,693 in Q2,2023.

    In addition, she said pension funds and assets witnessed a growth of 3.51 per cent from N16.76 trillion as at Q2, 2023 to N17.35 trillion as at Q3, 2023.

    She, however, noted that contributions of employees remitted by employers decreased by 14.15 per cent during the quarter from N520.96 billion in Q2 to N287.57 billion in Q3. The DG stated that the rate of inflation increased to 26.72 per cent in September, 2023 from 22.79 per cent in June, 2023 yet the fund grew.

  • Pension funds grow by 18% to N18.3tr

    Pension funds grow by 18% to N18.3tr

    Nigeria’s pension fund assets have increased to N18.35 trillion as at December 2023.

    A report obtained yesterday showed that pension funds grew by N3.36 trillion or 18 per cent to cloe 2023 at N18.35 trillion as against N14.99 trillion recorded in December 2022.

    The N3.36 trillion growth last year was one of the highest since the commencement of the Contributory Pension Scheme (CPS) about 20 years ago.

    Further analysis showed that the funds had grown N1.56 trillion or 10 per cent in 2022, rising from N13.42 trillion in 2021.

    Pension funds had risen by N1.1 trillion or 8.3 per cent in 2021 from N12.30 trillion recorded in 2020.

    In 2020, pension assets rose by 16.9 per cent or N2.08 trillion in 2020 from N10.21 trillion posted in 2019.

    A breakdown of how Pension Fund Administrators (PFAs) under the supervision of PenCom invested the fund as at last December, showed that about 70 per cent of the fund was invested in Federal Government’s securities.They invested a total of N11.92trillion in FGN Bonds, Treasury Bills, Agency Bonds, SUKUK Bonds and Green Bonds.

    State Government Securities, on the other hand, got N271.35 billion while corporate debt securities N1.90 trillion.

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    The PFAs invested N1.67 trillion in money market instruments; domestic ordinary shares got N1. 57 trillion; while foreign ordinary shares got N202.18 billion.

    Acting Chief Executive Officer, Nigerian Exchange (NGX), Mr. Jude Chiemeka, has said the launch of the NGX Pension Broad Index enhances opportunities for pension investments in quoted equities as the index provides a broader benchmark for tracking equities investment by the pension industry.

    The NGX Pension Broad Index is designed to track the performance of equity securities that adhere strictly to the profitability and dividend payment criteria, along with other parameters specifically tailored to the pension industry.

    With an all-encompassing approach, the index imposes no limits or caps on the number of stocks it can include as constituents. Currently featuring 84 equities, the NGX Pension Broad Index aligns with the provisions of the Pension Reform Act of 2014 and the Amended Regulation on the Investment of Pension Fund Assets proposed by PenCom.

    Chiemeka said the collaboration between the NGX and National Pension Commission (PenCom) underlined shared commitment to create values for investors.

    According to him, the NGX Pension Broad Index is poised to play a pivotal role in guiding investment decisions and enhancing the overall stability of Nigeria’s pension industry.

    “The collaboration between NGX and PenCom underscores a shared commitment to fostering transparency, compliance, and growth within the Nigerian capital market. I am pleased with the approval granted by the National Pension Commission for the NGX Pension Broad Index to serve as the benchmark index for Nigeria’s Pension industry equity investment portfolios. This further solidifies the credibility of the index as a reliable yardstick for evaluating the equity performance of pension industry investments,” Chiemeka said.

    Chiemeka noted that the NGX Pension Broad Index has exhibited robust performance since its launch last year as the index stands out for its well-diversified composition, encompassing high-quality stocks across key sectors, including banking, insurance, oil and gas, consumer goods and industrial goods.

  • Pension funds gain N588b to hit N17.35tr in Q3

    Pension funds gain N588b to hit N17.35tr in Q3

    Nigeria’s pension fund under the Contributory pension Scheme (CPS) gained N588.1 billion in the third quarter to close the period at N17.35 trillion.

    Monthly reports by the National Pension Commission (PenCom) showed that pension fund grew by 1.83 per cent in July, 1.31 per cent in August and 0.33 per cent in September.

    Overall, the fund grew by 3.47 per cent or N588.1 billion during the three-month period.

    The reports showed that the current net asset value of pension funds stood at N17.35 trillion by the period ended September 30, 2023. In August, the fund recorded N17.29 trillion while N17.06 was recorded in July.

    Director-General, National Pension Commission (PenCom), Mrs. Aisha Dahir-Umar, told The Nation that the CPS has boosted the economy by generating a huge pool of long-term funds.

    She said these funds have been available for investments, leading to national economic development.

    Besides, she said the investment of the funds not only yields good returns for contributors under the CPS, it further guarantees payment of pension benefits after retirement to every Nigerian worker.

    She disclosed that as of September 2023, pension funds have channelled N672.1 billion to finance infrastructure projects in the country through Pension Fund Administrators (PFAs).

    According to her, the breakdown of the amount indicated that N261.79 billion has been committed to investments in real estate properties, reflecting a strong focus on this sector to bolster national infrastructure.

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    She added that N136.03 billion has been invested in the infrastructure funds, demonstrating a keen dedication to supporting vital infrastructure initiatives while N154.76 billion has been strategically allocated to Sukuk bonds, a critical financial instrument for infrastructure development.

    She also noted that N98.55 billion has been invested in green bonds, underlining the commitment to environmentally sustainable projects while N20.97 billion has been invested in Real Estate Investment Trusts (REITs), aligning with the overall strategy to boost infrastructure financing.

    “These substantial investments collectively signify a proactive approach to enhancing the nation’s infrastructure with pension funds. Under the Contributory Pension Scheme (CPS), pension funds have emerged as a formidable force in addressing the infrastructure financing gap in Nigeria, providing essential support for the development of vital projects throughout the country. As pension funds increasingly establish themselves as a viable alternative source of infrastructure funding in Nigeria, they play a pivotal role in stimulating economic growth and addressing the nation’s urgent infrastructure requirements. One of the most noteworthy developments is the allowance for pension funds to invest in government-issued infrastructure bonds and Sukuk bonds. This progressive step has paved the way for financing infrastructure projects through debt instruments, offering stable returns for pension funds while bolstering critical national projects.

    “The primary objectives of pension fund investments in infrastructure are the safety and security of pension funds. Furthermore, maintaining sufficient liquidity is crucial to meet pension obligations promptly, ensuring retirees receive their benefits as scheduled. To meet these objectives, pension funds invested in infrastructure adopt strategic asset allocation strategies that carefully balance risk and return. As pension funds assume a central role in infrastructure financing, PFAs are guided by the priorities of safeguarding pension savings and achieving fair returns on investments. By harnessing the substantial pool of retirement funds, Nigeria’s pension system is securing the future well-being of workers in retirement while instigating transformative change in the country’s infrastructure landscape,” Dahir-Umar said.

  • Pension funds to hit N10tr by Dec

    Going by the steady growth projection of pension funds assets, the funds may hit N10 trillion by December.

    The funds, which has been growing at the rate of over N100 billion  monthly, since January 2019, stood at N9.33 trillion in June.

    This was shown in the monthly pension funds’ summary report by the National Pension Commission (PenCom).

    The PenCom regulates and supervises the fund while Pension Fund Administrators (PFAs) manages and invests the fund for contributors and retirees under the Contributory Pension Scheme (CPS).

    The fund had grown to N8.74trillion in January; N8.91trillion in February; N9.03 trillion in March.; N9.12 trillion in April, N9.22 trillion in May and N9.33 trillion in June, making it to grow by N686 billion in six months.

    The more than N100 billion growth mark beats the N25 billion projection witnessed in the funds before 2017.

    Meanwhile, the report showed that a major chunk of N7.21 trillion out of the N9.33trillion recorded in June is from Retirement Savings Accounts (RSA) holders.

    A further breakdown of the June report under review showed that out of the RSAs’ fund of N7.21 trillion, retirees fund, categorised under Fund IV is N751.73billion while contributors, categorised under Fund I, Fund II and Fund III, own N6.51 trillion.

    Other contributions to the fund include N958.2 billion from existing schemes and N1.24 trillion from Closed Pension Fund Administrators (CPFAs).

    Meanwhile, the PFAs, the report indicated, invested a major chunk of the fund, totaling of N6.48 trillion into Federal Government Securities out of the N9.33 trillion in the period under review.

    Out of the N6.48trillion invested by the PFAs, N4.43 trillion was invested  in Federal Government Bonds; N1.93 trillion in Treasury Bills; N11billion in Agency Bonds (NMRC and FMBN); N86 billion in Sukuk Bonds; N12 billion in Green Bonds and N129 billion in state government Securities.

    The PFAs, however, invested N505.82 billion in corporate debt, while N1.04trillion was invested in Local Money Market Securities and N23 billion in Mutual Funds.

  • British firms, pension funds to report climate risks

    British public companies and pension funds may have to publish by 2022 what risks their businesses face from climate change under a new so-called green finance strategy.

    A commuter walks along Waterloo Bridge, which is being blocked by climate change activists, during the Extinction Rebellion protest in London, Britain.

    Britain last week became the first G7 country to sign into law a requirement to reach net zero emissions by 2050 and the green finance strategy, published on Tuesday, sets out plans to increase investment in sustainable projects and infrastructure.

    The government paper builds on disclosure on climate risks set out by the G20 Task Force on Climate-related Financial Disclosures.

    The government report said the financial sector needed be at the heart of changes required to meet the net zero emissions goal.

    “The re-allocation of tens of trillions of dollars of capital towards green investment offers the potential to reshape cities, energy systems and land use around the world. The nature of this investment … will determine the future of our climate,” the report said.

    “This includes setting expectations for publicly listed companies and large asset owners to disclose by 2022 how climate change risk impacts their activities.”

    It said it would work with regulators to decide whether mandatory disclosures, rather than the current voluntary system, was needed.

    The climate risks include potential “stranded assets” of fossil fuel companies which may not be able to burn all their oil, gas or coal resources if carbon emissions are limited. Insurance companies have also warned of the risk of claims relating to increased extreme weather damage from floods or hurricanes.

    Many investors have called on companies to provide better communication on how climate change could impact their businesses, amid concerns that assets are being mispriced because the full scale of the risk is not being factored in.

    The overall share of the market capitalisation of mining and oil and gas stocks in Britain’s blue-chip FTSE 100 index .FTSE is about 17 per cent.

  • Pension funds, others oversubscribe Series-1 Green Bonds by 60%

    North South Power Company Limited (NSP), through NSP-SPV PowerCorp Plc, has issued its first N8.5 billion 15-year 15.60 per cent Series 1 Guaranteed Fixed Rate Senior Green Infrastructure Bonds (“Series 1 Green Bonds”).

    The bond is due in 2034 under a N50 billion Debt Issuance Programme.

    The Series 1 Green Bonds is the first certified green corporate bond and the longest tenured (15 years) corporate bond issued in the Nigeria debt capital markets.

    Its Executive Vice Chairman and CEO, Olubunmi Peters, who spoke in Abuja, said  the success of the bond issuance is a significant milestone in the company’s long-term corporate strategy, demonstrating its market leadership, innovation and commitment to the highest standards of environmental, social and corporate governance.

    He said: “With the completion of the Series 1 Guaranteed Green Infrastructure Bonds issuance, the Company has established a long-envisioned link with a more sustainable long-term, local currency financing required to implement its ambitious strategic power generation expansion plan through the capital markets.”

    The Series 1 Green Bonds was oversubscribed by 60 per cent with firm commitments from 12 institutional investors including nine pension funds, and priced at 70 bps spread to the comparable 15-year sovereign benchmark bond (FGN 2034) using the closing yield on the reference date of February 4 adopted for the book building.

    The Series 1 Green Bonds was certified by TUV NORD CERT under the Climates Bonds Standard, in accordance with the International Capital Market Association’s (ICMA’s) Green Bond Principles, Federal Ministry of Environment’s Nigerian Green Bond Guidelines, and the Green Bonds Issuance Rules of the Securities & Exchange Commission (SEC).

    The development of the Green Bond Framework and the pre-issuance verifications was obtained through technical assistance and support from the African Local Currency Bond Fund, an initiative of KfW Development Bank.

    The board received approval on September 26 last year to raise additional capital and got regulatory approval from SEC in December 31 of same year.

    Commenting on the appointment, of United Capital Plc’s  as the lead issuing house and financial adviser of the first Corporate Green Infrastructure Bond by NSP-SPV PowerCorp Plc, Group Chief Executive Officer, of United Capital Peter Ashade said: “United Capital is always exploring ways to provide innovative investment banking solutions to our clients.

  • Ogun workers decry 106 months unremitted pension funds, others

    Civil servants in Ogun State have expressed worry over the “uncertain future” that awaits them, following the non-remittance of 106 months of Contributory Pension by the Ibikunle Amosun administration.

    Acting under the aegis of Joint National Public Service Negotiating Council (JNPSC), the workers sent a letter, dated December 5, to the governor on their plight.

    They decried the unpaid four-year leave bonus, 10 months of unpaid Trade Union check-off due and gratuity payment suspended since January 2014.

    In the letter, titled: Revisiting Our Plight: Unpaid Entitlements and Other Issues, was signed by its Secretary, Comrade Adebiyi Olusegun,

    The workers also listed months of unpaid global deductions and outstanding promotion from 2016, 2017 and this year as arrears owed them by the state government.

    They said the situation had left them at the “crossroads where capacity to absorb shocks and uncertainties any longer has been exhausted”.

    According to them, the government breached an agreement on the last tranche of the Paris Club refund of N17.3 billion to the state for the payment of arrears of trade union check-off dues.

    The letter said: “We must as well register our displeasure on the sort of maltreatment meted out to the Organised Labour over the last tranche of the Paris Club refund of N17.3 billion to the state, which from the outset, we collaborate with open conscience to have addressed a press conference hurriedly that the state government will commit over N10 billion of it to offering various outstanding due to state workers, inclusive of all arrears of Trade Union check-off dues as communicated to us by the Commissioner of Finance.

    “We, therefore, take the outright neglect of Trade Union’s in eventual payment of some these arrears as betrayal of trust.”

    The workers urged the government to address the issues they raised to avoid an industrial disharmony.

    They called for an “immediate action at addressing these long-drawn issues would go some miles at dousing the tensed situation now at its ebbs which, as it were, might disrupt the relative industrial harmony currently being experienced in the state”.

    Also, workers of Tai Solarin College of Education (TASCE), Omu-Ijebu, Ogun State, have urged President Muhammadu Buhari to order Amosun to pay them their salary arrears.

    In a letter to the President by the Chairman of the school’s Coalition Staff Union, Mr. Daniel Aborisade, the workers said the state government was owing them N4 billion Consolidated Tertiary Institutions Salary and Consolidated University Academic Salary Structure arrears from July 2009 to last October.

    Aborisade said the money is owed them by the former administration of Gbenga Daniel and his successor, Amosun.

    The letter reads: “We were further subjected to frustration and untold hardship by the government due to the non-payment of salary for 14 consecutive months, making it difficult to feed ourselves, our immediate family and cope with the present economy imbalances.

    “After much persuasion and appeals to the government, vis-a-vis the appointment of a new Provost for the college, the state government resumed the payment of half-salary with effect from August, 2016 to July 2017 and October 2017.

    “Between August, 2017 and the time of writing this report, the percentage of the monthly salary paid to workers in the college has increased to 60 per cent (September 2017 to September 2018).

    “Between May 2011 and October 2018, the college has lost 45 employees. Some of them died because of little medical expenses that could not be paid at hospital.”