Decline in bond prices, and profit-taking activities in the Nigerian equity market saw Nigeria’s Nigeria’s pension asset fell to their lowest position in four months.
The country’s total pension assets lost a total of N51.3 billion to stand at N12.25 trillion in the month of February 2021. This is according to the monthly pension report released by the Nigerian Pension Commission (PENCOM).
Also total pension asset declined by 0.42 per cent from N12.29 trillion recorded as of January 2021 to N12.25 trillion in February 2021.
Federal g overnment bonds stood at N7.34 trillion, accounting for 59.6 per cent of the total pension asset under management.
A cursory look at the data revealed that the pension asset had reduced by N6.93 billion in the previous month, before losing N51.28 billion in the period under review.
As of February 2021, RSA Fund II accounted for 43.82 per cent of the total pension asset, as it stood at N5.37 trillion, followed by Fund III with N3.16 trillion (25.79%), and CPFAs at N1.47 trillion (11.98%).
While responding to questions regarding the recent decline in pension fund assets, Oguche Agudah, the CEO of Pension Fund Operators Association of Nigeria (PenOp), stated that it was due to the decline in prices of fixed securities.
He, however, called on pension contributors to increase their contributions as that would guaranty more funds. He also called on employers in the private and government sector to remit due pension contributions.
Commenting on the reasons for the loss, Mrs Amaka Andy-Azike, the head of branding and communication of PenOp, stated that the losses are however unreali s ed losses and would have recovered in the month of March as the yield of government securities continues to trend upward.
She, therefore, called on pension contributors to be calm as there was no cause for worry. Mrs Amaka also reiterated that the pension scheme prioritises secured investments rather than riskier instruments that could yield higher returns.