Growth in Nigeria’s pension assets dropped to a 12-month low of ₦61.91 billion at the end of March 2025, primarily due to outflows from approved existing schemes (AES), according to the National Pension Commission (PenCom) and industry analysts. This marks a significant deceleration after several months of robust growth in the pension industry.
After rebounding in May 2024 from a negative position recorded in March 2024, the pension fund industry had maintained a steady upward trend despite market volatility. However, the sharp slowdown in March 2025 has raised fresh concerns over fund outflows and the structural dynamics of pension asset management in Nigeria.
According to PenCom data, existing schemes—which include staff retirement benefit funds, retirees’ funds, gratuity funds, and other employer-based compensation schemes—dropped in value from ₦2.84 trillion in February to ₦2.77 trillion in March 2025, reflecting the impact of withdrawals and benefit payments.
A Chief Investment Officer at one of the top Pension Fund Administrators (PFAs), who chose to remain anonymous, confirmed that the decline in growth could be traced to outflows from some of these approved schemes.
“It’s possible some AES schemes had large outflows during the period. These are funds that routinely make payments to retirees and beneficiaries, especially in Q1,” the officer explained.
The total pension assets under management (AUM) stood at ₦23.33 trillion in March, a modest increase from ₦23.27 trillion in February, but far below the monthly growth trend seen over the past year. The number of Retirement Savings Account (RSA) holders reached 10,689,846.
Historical data from PenCom showed that the pension industry had posted higher monthly growths in the previous year, including ₦256.8 billion in July, ₦304.9 billion in August, ₦345.7 billion in September, ₦541.0 billion in November, and ₦254.5 billion in December 2024. Growth picked up again in early 2025, with ₦349.3 billion in January and ₦405.3 billion in February, before falling sharply in March.
Oguche Agudah, CEO of the Pension Fund Operators Association of Nigeria (PenOp), explained that the decline may also reflect reclassifications of assets rather than a true reduction in value.
“Many assets from existing employer-run schemes were recently contracted to PFAs. Instead of transferring these assets wholesale, many employers moved them into individual RSA accounts, which may have contributed to the dip in existing scheme balances,” Agudah said.
He added that alongside this shift, there was also an uptick in investments in corporate debt securities and domestic equities, which continues to support the longer-term growth trajectory of pension assets.
Investment analyst Michael Oyebola of Money Counsellors noted that asset growth tends to slow in March due to end-of-fiscal-year payouts and employer benefit disbursements, which often occur in the first quarter.
“It’s not unusual to see a slowdown in March. Payments approved by employers and PFAs are often executed around this time, especially for retirements and gratuities,” he said.
He also highlighted a reduction in investments in money market instruments such as treasury bills and cash balances, suggesting that some liquid assets were converted into cash to meet benefit payments.
Despite the March decline, overall investment performance between December 2024 and March 2025 remained positive. Data from PenOp showed notable asset growth across multiple classes:
Equities rose from ₦2.51 trillion to ₦2.83 trillion, indicating growing confidence in the stock market.
FGN securities—still the dominant asset class due to their security—grew from ₦14.11 trillion to ₦14.48 trillion.
Corporate debt securities increased from ₦2.25 trillion to ₦2.35 trillion.
Mutual fund investments more than doubled from ₦80.78 billion to ₦154.05 billion, signalling a shift toward collective investment schemes.
Cash and other liquid assets grew from ₦427.84 billion to ₦502.29 billion, reflecting enhanced liquidity buffers.
PenOp noted that the diversification of pension assets shows cautious optimism among PFAs amid ongoing market reforms and regulatory shifts. The gradual shift towards equities, mutual funds, and corporate instruments reflects a more balanced investment strategy tailored to meet rising return expectations and long-term pension obligations.
While the March figures may signal a temporary slowdown due to seasonal outflows, the general outlook for Nigeria’s pension industry remains positive. Strategic diversification, growing market confidence, and sustained regulatory oversight are expected to continue driving steady asset growth over the medium term.
