Pension Industry In Need Of New Members; Asset Under Management Increased By 14.4% YoY in Feb 2019


Monday, May 13, 2019  08:52AM / By FBNQuest Research


The assets under management (AUM) of the regulated pension industry increased by 14.4% y/y in February to N8.91trn (US$29.0bn) and by 1.9% m/m. They are growing at a decent rate yet, at just 7.0% of 2018 GDP, are running behind peer markets. 

The comparable regulator in Kenya, the Retirement Benefits Authority, has put AUM at end-2018 at KES1.17trn (US$11.4bn), equivalent to 15.0% of the most recent nominal GDP figure available. Nigeria was relatively late (2004) in the establishment of its regulated industry.     

The Nigerian industry’s holdings of FGN paper amounted to 73.1% of their AUM in February, compared with 70.7% one year earlier. 

The role of the PFAs in naira debt markets remains a core element of any assessment of direction. Their holdings of FGN bonds at end-February represented 48.1% of the stock of the instruments at end-year. 

In the far smaller sukuk market, the PFAs held 47.9% of the Islamic bonds in issuance. 

The share of AUM invested in domestic equities has declined over 12 months from 9.4% to 6.8%. By way of explanation, we note that the NSEASI fell by 26.8% over the same period. 

The latest PenCom data show a total of 8.57 million scheme memberships, implying an average portfolio of N1.04m (a marginal increase on the month).



AUM of PFAs, Feb 2019 (% shares) Total: N8.91trn

Proshare Nigeria Pvt. Ltd.


Sources: National Pension Commission (PenCom); FBNQuest Capital Research


This average should decline now that the PFAs are able to market micro pensions for the self-employed and employees of small firms. In January the regulator suggested an increase in AUM over an unspecified timeframe of N3trn, and an additional 12 million contributors over five years.  

Proshare Nigeria Pvt. Ltd.

Related News

1.       The Informal Sector to Benefit From The Contributory Pension Scheme

2.      8.41m Workers Are Registered Under The Pension Scheme As At Q42018 - NBS

3.      Addressing The Mysteries Of Retirement Planning - Meristem

4.      PFAs In Need of New Clients; Asset Under Management Increased By 14.9% To N8.64trn In December 2018

5.      Pencom Releases Guidelines on Voluntary Contribution under the Contributory Pension Scheme

6.      Limited Penetration of The PFAs; Asset Under Management Increased By 16.5% to N8.35trn

7.      Pension Reform Advocacy Group Petitions EFCC Over Governance Issues At PENCOM

8.     UK Financial Conduct Authority And The Pensions Regulator Publish Joint Pensions Strategy

9.      A New Micro Pension Product to Boost The AUM of PFAs

10.  The Challenge With Pensions In Nigeria

11.   8.13m Workers Are Registered Under The Pension Scheme As At Q2 2018 - NBS

12.  7.98m Workers Are Registered Under The Pension Scheme as at Q1 2018 - NBS

13.  PENCOM Releases Draft Framework for Micro Pension Plan

14.  PENCOM Issues Draft Guidelines for The Micro Pension Plan

Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.

Related News