Retirement Funds Get Boost As Pension Stocks Index Surges By 59.7%

…Outperforms Nigerian Exchange index by 8.5%

Nigerian savers eyeing a secure retirement can breathe easier, as the Nigerian Exchange (NGX) Pension Broad Index, a benchmark for pension-compliant equity investments tracking pension-approved stocks, soared 59.72 per cent in 2025, surpassing the NGX All-Share Index’s 51.19 per cent gain by over 8.5 percentage points.

This means that Nigerian workers’ retirement savings likely grew faster than the general market average, boosting their long-term nest eggs.

The NGX noted that the performance is attributed to the index’s focus on pension-eligible equities, providing a balanced exposure to high-quality stocks across key sectors. The index’s strong showing highlights the growing role of pension assets in Nigeria’s capital formation and economic development.

What this means for workers

Analysts explain that higher returns from pension-compliant equities result in larger balances in Retirement Savings Accounts (RSAs) managed by Pension Fund Administrators (PFAs).

This happens because PFAs invest contributions in approved high-quality stocks across sectors like finance and energy, which outperformed amid market reforms.

Additionally, workers in active funds (such as RSA Fund II for individuals under 50) are expected to experience compounded growth over time, which can improve retirement payouts or lump sums, as stable, regulated investments reduce risks while capitalising on equity gains.

The NGX Pension Broad Index is a stock market index that tracks the performance of pension-eligible equities in Nigeria. It includes a diversified basket of high-quality stocks across various sectors, providing a balanced exposure for pension portfolios.

The NGX Pension Broad Index currently tracks 84 high-quality stocks across various sectors, including banking, insurance, oil and gas, consumer goods, and industrial goods. Some of the notable stocks under this index include: Access Holdings, Airtel Africa, Aradel Holdings, BUA Cement, Dangote Cement, Ecobank Transnational Incorporated, Fidelity Bank, Guaranty Trust Holding Company, MTN Nigeria Communications, Nestle Nigeria, Seplat Energy, Stanbic IBTC Holdings, United Bank For Africa, Zenith Bank Plc, among others.These stocks meet specific eligibility criteria, including a consistent track record of taxable profits and dividend payments.

The index closed the year at 2,917.84 points, up from 1,826.89 points at the end of 2024, reflecting strong performance by pension-eligible equities amid a year of heightened market activity and reform-driven investor confidence.

Unlike broader market indices, the NGX Pension Broad Index tracks only equities that meet the investment eligibility criteria set by the National Pension Commission (PenCom). This makes it a key reference point for Pension Fund Administrators (PFAs) seeking compliance with regulatory guidelines while generating competitive returns.

The index comprises a diversified basket of high-quality equities across various sectors, including financial services, telecommunications, consumer goods, industrials, and energy, offering a balanced exposure for pension portfolios. In 2025, the index outperformed the ASI by more than 850 basis points, reinforcing the potential of pension-compliant stocks to deliver strong, risk-adjusted returns.

Analysts noted that the strong performance underscores the increasing significance of pension assets in capital formation and economic development, as well as the importance of transparent, rules-based indices for portfolio construction and long-term retirement planning.

NGX reiterated its commitment to engaging with PenCom and the PFA community to promote market education, data analytics, and pension-focused investment products, helping investors make informed allocation decisions.

As Nigeria’s pension industry continues to expand, the NGX Pension Broad Index remains a critical tool for measuring performance, supporting long-term retirement outcomes, and deepening equity participation in the domestic capital market.