PFAs Performance Above Industry Thresholds in 2022, Q1

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…… the total assets under the Contributory Pension Scheme increased to N13.88 trillion approximately as at the end of March 2022

The performance of all Pension Fund Administrators (PFAs) in Nigeria from January through to March 2022, for Fund I, II, III and IV, was GREEN, that is no PFA had a negative Return on Investment (ROI) for Fund I, II, III and IV during the period under review.

 

According to the report, all PFAs average ROI for Fund 1-4 for Year 2020 was Bullish while in comparison, 2021 was Bearish, will PFA average ROI for Fund 1-4 be Bullish or Bearish in 2022?

 

The Performance of all PFAs from January through to March 2022 shows as follow for the 1st quarter of 2022.

 

The ROI per fund shows the average performance of all PFAs in Nigeria for Fund I, II, III and IV from January through to March 2022 as below:

Fund I Industry Average for 20 PFAs 2.54%

Fund II Industry Average for 20 PFAs 2.58%

Fund III Industry Average for 20 PFAs 2.42%

Fund IV Industry Average for 20 PFAs 2.38%

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Also, below are all PFAs on the Top five (5) of PFAs with the highest ROI for the four (4) Funds from January through to March 2022.

 

PFAs in Top 5 in 4 Funds;

First Guarantee Pension Limited

 

PFAs in Top 5 in 3 Funds;

Leadway Pensure PFA Limited

Pensions Alliance Limited

 

PFAs in Top 5 in 2 Funds;

OAK Pensions Limited

IEI-Anchor Pension Managers Limited

Sigma Pensions Limited

 

 

PFAs in Top 5 in 1 Fund;

Stanbic IBTC Pension Managers Limited

ARM Pension Managers Limited

FCMB Pensions Limited

CrusaderSterling Pensions Limited

The report disclosed that top 5 performances of PFAs based on ROI shows below from January through to March 2022:

Fund I am a special but optional Fund that Retirement Savings Account (RSA) holders who are below 50 years old can request to be moved to. It has the highest exposure to stock among the Funds under the Multifund structure, meaning that a higher percentage of Fund I is invested in buying shares of companies compared to other funds. If you have requested to be moved to Fund I, you should pay particular attention to the performance of Fund I but also constantly have a look at the performance of Fund II to be sure you made a right choice moving to Fund I.

 

Fund II is the default fund under the Multifund structure for RSA holders who are below 50 years old. If you are below 50 years old and you have not specifically requested that your PFA should move you to Fund I, then you will be in Fund II. You should pay particular attention to the performance of Fund II but you should also monitor the performance of Fund I to assist you in deciding whether to move to Fund I or not.

 

Fund III is default Fund for RSA holders who are 50 years & above but have not retired. Multifund structure gives PFAs the right to move anybody who is 50 years & above from Fund II to Fund III but the law also allows you to request to be moved back to Fund II if you choose to. If you are 50 years & above and you have not requested to be moved back to Fund II, then you will be in Fund III. You should pay attention to the performance of Fund III and keep an eye on the performance of Fund II to enable you decide whether to move back to Fund II.

 

Fund IV is the Retiree Fund with the lowest exposure to equity. All RSA holders that have retired are automatically moved to Fund IV and Retirees cannot move to other Funds.

 

In the same vein, Contributory Pension Assets (CPA) for the period under review showed an increased by N113.75 billion approx in March 2022 compared to an increase of N156.20 billion in February 2022.

 

While the total assets under the Contributory Pension Scheme increased to N13.88 trillion approximately as at the end of March 2022 compared to the N13.76 trillion as at the end of February 2022.

The Top 7 places where pension funds were invested as at March 2022 are;

FGN Securities N8.50 trillion (61.26%)

Local Money Market Securities N2.25 trillion (16.21%)

Corporate Debt Securities N1.01 trillion (7.26%)

Domestic Ordinary Shares N944 billion (6.80%)

Cash & Other Assets N473 billion (3.41%)

State Govt. Securities N172 billion (1.24%)

Real Estate Properties N156 billion (1.13%)

According to the National Pension Commission (PenCom) saying the figures are based on unaudited valuation reports on the Status of Contributory Pension Assets as at end of March 2022.

 

Definition of Terms:

EXISTING SCHEMES: Approved Existing Schemes are Pension schemes existing prior to the introduction of the Contributory Pension Scheme (CPS) in June, 2004 and were approved to continue as AES. Membership of this fund is restricted to employees of that specific organization.

 

CPFAs: These are Pension schemes in the private sector existing prior to the introduction of CPS and were licensed to operate as Closed Pension Fund Administrators and membership of this fund is restricted to employees of that specific organization.

 

RSA FUND I: Retirement Savings Account Fund I (An Active Contributor who is below 50 yrs of age and chooses for his contribution to be invested in this fund).

 

RSA FUND II: Retirement Savings Account Fund II (default fund for all Active Contributors who are below 50 yrs of age).

 

RSA FUND III: Retirement Savings Account Fund III (default fund for all Active Contributors who are 50 yrs and above).

 

RSA FUND IV: Retirement Savings Account Fund IV (Fund for Retirees only).

 

RSA FUND V: Micro Pension Fund is for the informal sector and employees of organizations with less than 3 employees.

 

RSA FUND VI: Non-Interest Fund


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