The pension fund asset size increased by 628% over the last decade, reaching 14.27 trillion as of 30 June 2022. This is a reflection of the Industry’s development and growth. The Pension Reform Act (PRA) of 2004 and its amendment in 2014, which effectively redefined retirement planning in Nigeria and led to a significant increase in the number of enrolees and the size of managed assets in the Industry, are largely responsible for this, according to Agusto & Co.The growth of the Industry has been underpinned by the National Pension Commission’s (PenCom) strict regulation. All Nigerian pension fund administrators (PFAs) met PenCom’s April 2022 minimum capital requirement of 5 billion, up from 1 billion. As a result, there have been a number of significant mergers and acquisitions (M&As), including those between FCMB Pensions and AIICO Pensions, Access Holdings and First Guarantee Pensions, and four others. Given the strategic importance of the Industry to the Nigerian economy and the need to more closely align the Nigerian pension scheme with international standards in the near term, Agusto & Co. anticipates that PenCom’s regulation will continue to be robust, which will be crucial to the operations, activities, and prosperity of the pension industry.Agusto & Co. predicts that pension asset growth will decelerate from the five-year average of 12.2% to c11% in 2022 as a result of low interest rates and a decrease in the rate of contributions as a result of high unemployment and widespread emigration. This leads us to believe that by the end of 2022, pension assets will total $14.8 trillion.
