The National Pension Commission (PenCom), in its unaudited report on the pension fund industry portfolio for the period ending May 31, 2024, noted that the Closed Pension Fund Administrators (CPFAs) invested N107.1 billion during the month, marking a 10.2 percent increase from N97.2 billion in April 2024.
The PenCom report also indicated that CPFAs raised their investment in foreign ordinary shares by 9.3 percent, reaching N268.7 billion in May, up from N245.9 billion in April.
Overall, total pension fund assets rose by 2.02 percent to N20.2 trillion in May 2024, compared to N19.8 trillion in April. Additionally, Retirement Savings Account (RSA) registrations increased by 0.4 percent, totaling 10,351,624 in May, up from 10,315,034 in April.
The pension industry currently includes 19 Pension Fund Administrators (PFAs) and five CPFAs. Of these CPFAs, three are affiliated with international oil companies: Agip CPFA Limited, Shell Nigeria CPFA Ltd, and TotalEnergies EP Nigeria CPFA Limited.
Under Nigeria’s existing pension law, only the foreign-affiliated CPFAs are permitted to invest offshore, while local PFAs and the remaining two CPFAs cannot.
The Pension Fund Operators Association of Nigeria (PenOp) has advocated for an amendment to the Pension Reform Act to allow PFAs to invest a portion of the pension funds offshore as a hedge against inflation and naira devaluation. PenOp believes this move is necessary to prevent old age poverty triggered by rising inflation and currency devaluation.
Dave Uduanu, a PenOp member and Managing Director of Access Pensions, emphasized that since Nigeria’s economy heavily relies on the dollar, allowing some pension funds to be invested offshore serves as a safeguard. He added that the recommendation is currently with PenCom and the Central Bank of Nigeria (CBN), and the input of senators and House of Representatives members would be beneficial to ensure its approval.
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