Analysis of Contributory Pension Assets, Inception to Dec 2021

June 15, 2022 PensionNigeria

Contributory Pension Assets in Nigeria increased by approximately N1.12 trillion in the year 2021 representing a 9.09% increase Year over Year (YoY). The Increase brought the total pension assets as at December 2021 to N13.42 trillion from the N12.31 trillion as at December 2020.

The 9.09% Year over Year increase for 2021 is the lowest since the inception of the Contributory Pension Scheme (CPS) and it’s the first time since inception that Contributory Pension Assets increased by a single digit.

The lowest year over year increase for Contributory Pension Assets in 2021 could be easily linked to Pension Fund Administrators (PFAs) performance, as shown in the 2021average Return on Investment for Retirement Savings Account (RSA) Fund 1 to 4, which was 6.5% compared to the 19.3% for year 2020 and 13.05% for year 2019.

RSA Fund 1 to 4, make up about 78.47% of the total pension fund assets in the industry as at 31 December 2021 while Micro Pension Fund 5, Non-Interest Fund 6, Existing Schemes and Closed Pension Fund Administrators (CPFA) pension assets, make up about 21.53%. New RSA registrations most likely did not contribute much the the YoY increase because RSA registrations YoY percentage increase was at an all time low of 3.40%.

Will Contributory Pension Assets YoY increase return to double digits in year 2022 is a question to ask,

PensionNigeria estimates that CPS YoY increase will return to double digits in year 2022, if PFAs’ average performance for RSA Fund 1 to 4 return on Investment in year 2022 is at least 10% and National Pension Commission (PenCom) compliance efforts drives further compliance in the private sector.

Please see below Contributory Pension Fund Assets History Inception to Dec 2021

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