Total Pension Assets To Hit N20trn By 2023

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THE total assets of Nigeria’s pension industry is expected to hit N20trn by 2023 with 18% average growth in the next two to three years, pan-African credit rating company, Augusto & Co has said.

The firm noted that the growth in the pension industry’s managed assets had been driven by return on investment and additional contributions.

The firm noted that the pension industry’s assets under management stood at N12.3trn in December 31, 2020, which represented 20.6% growth over the N10.2trn that was reported at the end of 2019 and an 18.3% compound annual growth rate over the last five years.

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It added that the industry’s annual contributions over the last five years had averaged N699bn while withdrawals had averaged about N341bn, translating to a net annual contribution of N347bn which accounted for 26.6% of the industry’s growth over the period.

August and Co said, “The pension transfer window opened on November 16, 2020 to allow pension retirement saving account holders to switch Pension Fund Administrators once a year at most and no cost. As of the end of the second quarter of 2021, over 25,600 RSA holders with pension assets over N102.5bn were reported to have changed PFAs.

“We expect that in the subsequent quarters of 2021, the number of transfers will rise further as more enrollees become aware of the transfer process.”

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According to the rating agency, competition is expected to intensify in the pension industry as PFAs seek to attract new enrollees while retaining existing ones.

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