igeria’s total pension fund assets rose to ₦23.65 trillion at the end of April 2025, up from ₦23.33 trillion in March, according to the latest unaudited report by the National Pension Commission (PenCom). The increase reflects ongoing growth in the Retirement Savings Account (RSA) system, which includes contributions from workers under approved pension schemes, closed Pension Fund Administrators (PFAs), and unremitted contributions from employers.
The portfolio data shows that federal government securities continue to dominate the investment landscape. This includes instruments like FGN bonds, treasury bills, Sukuk, green bonds, and agency bonds, which together make up the bulk of pension fund investments in Nigeria. These government-backed assets are considered secure, offering reliable returns in a market often shaped by volatility and limited risk appetite.
However, PenCom has continued to urge pension fund administrators to reconsider their heavy reliance on government securities. The regulatory agency is pushing for greater diversification into alternative assets such as infrastructure projects, private equity, and real estate, which have the potential to offer higher long-term returns and better match the pension funds’ long investment horizon.
Speaking at a sensitisation workshop held in Lagos on Thursday, the Director-General of PenCom, Omolola Oloworaran, addressed Chairpersons of the Board Investment Strategy and Risk Management Committees of PFAs. She explained that the current bias towards high-liquidity assets is limiting PFAs from fully optimising the potential of Nigeria’s pension funds. She highlighted that alternative assets, especially infrastructure investments, not only offer diversification but also align better with the long-term nature of pension liabilities.
Oloworaran said, “Alternative assets provide a complementary pillar to the core investment strategies of pension funds. Investments in infrastructure and private equity, in particular, help align pension fund portfolios with their investment horizon, provide opportunities for diversification, and enhance risk-adjusted returns.”
Despite these calls, data continues to show a relatively conservative investment pattern by most PFAs. Analysts say this conservative stance is largely due to regulatory caution, lack of in-depth market data, and the relatively underdeveloped infrastructure financing ecosystem in the country.
The breakdown of the April 2025 data also shows that Fund II, which is the largest RSA fund designed for contributors below 49 years old, remains the biggest pool of pension assets. This is followed by Fund III, which targets contributors aged 50 and above and nearing retirement. These two funds continue to anchor the structure of the country’s pension system under the Contributory Pension Scheme.
In terms of participation, the total number of RSA registrations climbed to 10.72 million contributors as of the end of April, up from 10.69 million in March, indicating a steady increase in enrollment. This growth reflects ongoing employer compliance and improved public awareness about the importance of retirement savings, particularly within the formal sector.
Despite the recent growth in asset value and registration numbers, pension sector stakeholders say there is still a significant need to deepen coverage, especially in Nigeria’s large informal sector. According to PenCom, the potential for increasing participation in the Micro Pension Plan remains untapped, particularly among self-employed individuals and small business owners.
Industry experts say that expanding investment into alternative assets could also support Nigeria’s broader economic development goals, particularly in the areas of transport, energy, agriculture, and technology infrastructure. They also advocate for reforms that will strengthen governance, increase transparency in asset management, and provide a conducive environment for pension fund managers to participate in large-scale national development projects.
PenCom, through its investment guidelines, is exploring ways to balance portfolio safety with optimal returns by reviewing asset allocation limits and facilitating collaboration with infrastructure development agencies. The Commission believes that long-term investments, such as toll roads, renewable energy projects, and industrial parks, are not only viable but also critical to pension fund sustainability.
As of now, PFAs continue to operate within the current regulatory framework, but calls for more dynamic asset allocation strategies are expected to intensify as the pension industry matures. The regulator is optimistic that with the right incentives, education, and oversight, Nigeria’s pension fund system can evolve into a powerful engine for economic growth and retirement security.
