by NIyi JACOBS
Nigeria’s pension fund industry recorded another milestone in June 2025, with total assets under management rising to ₦24.63 trillion. This marks a 2.17 percent increase from ₦24.11 trillion in May and a year-on-year jump of 20.24 percent, signaling continued growth despite macroeconomic headwinds.
The latest data from the National Pension Commission (PenCom) indicates strong investor confidence, better asset allocation by Pension Fund Administrators (PFAs), and favorable market conditions. A key driver of this performance was the surge in domestic equities, supported by positive corporate earnings and bullish activity on the Nigerian Exchange. Equity assets jumped by ₦333.05 billion, or 12.12 percent, to reach ₦3.08 trillion, accounting for 12.5 percent of total pension assets. Foreign ordinary shares also recorded a marginal increase of 0.95 percent to ₦292.78 billion, suggesting cautious optimism in global markets.
Federal Government of Nigeria (FGN) securities remained the dominant investment class, growing by ₦232.96 billion or 1.56 percent to ₦15.19 trillion. This asset class continued to provide a stable and liquid platform for pension funds. FGN Bonds, which make up the majority, rose to ₦12.79 trillion, contributing over half of total assets. Treasury bills grew to ₦624.15 billion, while Sukuk Bonds climbed to ₦89.64 billion. Notably, Green Bonds spiked by 361 percent, reaching ₦10.71 billion, reflecting renewed interest in sustainable investments.
Despite gains in public securities, corporate debt instruments experienced a general decline. The value of corporate debt dropped by 1.26 percent to ₦2.26 trillion. All key subcategories recorded negative returns, with corporate infrastructure bonds and marked-to-market instruments posting the steepest drops. Still, the sector accounted for 9.19 percent of the pension portfolio, showing PFAs remain cautious in their approach to private-sector lending.
Money market instruments fell by 3.16 percent to ₦2.24 trillion, as fund managers redirected capital toward higher-yielding investments. Fixed deposits recorded a notable decline, while commercial paper usage rose significantly by 32.98 percent to ₦342.65 billion, indicating a strategic tilt toward short-term instruments. However, foreign money market holdings plunged by 24.69 percent, the sharpest single-month decline across the asset classes.
Alternative investments showed mixed outcomes. Mutual funds dipped slightly to ₦183.82 billion, with open- and closed-end funds also trending lower. Real estate investments fell 6.83 percent to ₦255.94 billion, largely due to revaluations. On the upside, infrastructure funds rose 5.62 percent and REITs grew modestly, reflecting a moderate rebound in appetite for long-term developmental assets.
Cash and other assets increased sharply by 21.35 percent to ₦394.18 billion, suggesting that PFAs are preserving liquidity amid market uncertainties.
In terms of fund classification, Fund II, which is the most subscribed by active contributors, rose from ₦10.04 trillion to ₦10.3 trillion, representing a 2.57 percent growth and accounting for more than 41 percent of the total portfolio. Fund III, targeted at older contributors, increased by 1.17 percent to ₦6.4 trillion. Fund I, designed for younger contributors seeking higher returns, rose 3.21 percent to ₦329.6 billion, while Fund IV, dedicated to retirees, grew by 2.14 percent. Fund V and Fund VI, created for micro pension and informal sector participants, also saw healthy growth of 3.86 percent and 2.90 percent respectively.
Legacy schemes and Closed Pension Fund Administrators (CPFAs) maintained strong momentum, contributing 12.08 percent and 10.7 percent respectively to the total asset base. The rise across these segments reflects the widespread impact of fund inflows and effective management across institutional platforms.
The number of Retirement Savings Account (RSA) holders also increased, rising from 10.76 million in May to 10.80 million in June. This represents a 4.01 percent year-on-year growth and confirms that despite prevailing economic challenges, workers continue to join the contributory pension scheme.
Overall, the industry’s performance in June 2025 underscores the resilience and adaptability of Nigeria’s pension system. While PFAs are increasingly turning to equities and government securities to drive returns, the drop in corporate debt and money market investments highlights their cautious stance in an unpredictable economic climate. As the second half of the year unfolds, all eyes will be on how PFAs respond to interest rate movements, inflation pressures, and regulatory adjustments to preserve value and protect contributors’ savings.
