Pension Fund Administrators (PFAs) have significantly increased their equity investments over the last year, jumping by 86 per cent, fuelled by better market conditions, diversification strategies, and growing investor confidence.
Analysts have noted that this represents a major shift from the traditionally cautious approach that favoured fixed income, especially Federal Government of Nigeria (FGN) securities.
Figures from the National Pension Commission (PenCom), as analysed by the Pension Fund Operators Association of Nigeria (PenOp), reveal that PFAs’ equity holdings surged from N1.94 trillion in August 2024 to N3.61 trillion by August 2025.
PenOp analysts attribute this rise to a robust stock market and renewed faith in capital market prospects.
While FGN securities remain the largest holding, they posted a moderate growth of 18 per cent, increasing from N13.4 trillion to N15.82 trillion, as PFAs progressively sought higher-yielding investments beyond government bonds.Investments in money market instruments also climbed 18 per cent, from N2.04 trillion to N2.4 trillion, reflecting ongoing preference for liquid, short-term assets.
However, PenOp’s head of Research & Investor Relations, Akinbola Akintola, highlighted that alternative assets performed even stronger: mutual funds expanded by 123 per cent (from N101.31 billion to N226.49 billion), private equity soared 153 per cent (from N107.81 billion to N273.27 billion), and real estate grew by 27 per cent (from N199.8 billion to N254.6 billion).
He noted that PenCom’s new investment guidelines, released in September 2025 — raising allocation limits for equities, private equity, and real estate while lowering the cap on FGN securities — are expected to accelerate this diversification trend.
Pension fund values rose markedly from August 2024 to August 2025, supported by steady contributor inflows and strong returns.
Fund I, the most risk-averse, increased by about 79 per cent, climbing from N217.03 billion to N389.15 billion.
Fund II rose 25 per cent from N8.73 trillion to N10.9 trillion, demonstrating solid investor sentiment.
Fund III grew 23 per cent, from N5.59 trillion to N6.88 trillion; Fund IV gained 25 per cent, moving from N1.51 trillion to N1.89 trillion.
Fund V also registered an impressive 63.5 per cent growth, jumping from N968.27 million to N1.58 billion. In comparison, Fund VI outpaced all with a 157 per cent surge, soaring from N70.63 billion to N181.23 billion, reflecting its aggressive investment approach.
PenOp analysts emphasised that this widespread growth across all six pension funds underscores increased contributions and smart fund management through diversified portfolios, signifying enhanced confidence in Nigeria’s pension system and a promising future for retirement savings.
As of July 2025, the industry’s total pension assets reached N25.79 trillion, with Retirement Savings Account (RSA) contributors numbering 10.83 million.
