Pension Industry Moves To Hedge Inflation For 10.7m RSA Holders

The pension industry regulator, the National Pension Commission (PenCom) is already discussing with the Pension Fund Administrators (PFAs) to explore alternative investment options in a bid to hedge inflation and get good returns on the investment of the N24 trillion pension fund assets in the country, LEADERSHIP learnt.

This will ensure that the 10.718 million Retirement Savings Account (RSA) holders get better returns on investment of their contributions.

Inflation rate in Nigeria is currently at double digit; 22.97 per cent in May 2025, thereby, limiting the rates of returns on most investment windows. However, there is a renewed interest from the industry to limit the impact of inflation on investment returns for pension contributors across the country.

From 2004, when the new pension scheme debuted till now, about N3 trillion has been accrued as Investment returns on pension assets, despite rising inflation figures. However, recent moves by the industry, according to experts, will further ensure more returns are accrued from investments of the N24 trillion assets.

At a recent event in Lagos, the director general, the National Pension Commission (PenCom), Omolola Oloworaran, had promised to work with pension fund operators to generate inflation plus returns for retirees and Retirement Savings Account (RSA) holders.

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This, she said, would be achieved through diversification of pension assets by diversifying some parts of its investment in federal government securities, regarded as a safe investment window, to alternative channels.

One of such alternatives the industry is eyeing is private equity investment, believed to bring better returns.

According to her, “We want to encourage pension fund operators to invest in alternative assets, essentially diversifying their portfolio. Currently, pension fund assets are in excess of N24 trillion and the majority of these funds are invested in traditional income instruments – Federal Government bonds and Treasury bills.

“Now, what we need to do as an industry is see how we can diversify that portfolio to ensure we generate inflation plus returns for retirees and RSA holders”