The Non-Interest Fund (Fund VI) under the multi-fund structure of Nigeria’s Contributory Pension Scheme has recorded the highest year-on-year growth rate as of August 2025, highlighting the rising popularity of ethical investment options among pension contributors.
According to data from the National Pension Commission (PenCom), Fund VI rose sharply to ₦181.23 billion by the end of August 2025, compared to ₦70.63 billion recorded in August 2024 — representing a 157 per cent increase within a year.
The Ethical or Non-Interest Fund, also known as Fund VI, was introduced by PenCom to give Retirement Savings Account (RSA) holders the opportunity to invest their pension assets in non-interest, Shari’ah-compliant instruments. It is divided into two categories — one for active RSA holders and another for retirees.
Fund VI operates strictly in line with Islamic Shari’ah principles, prohibiting investments in ventures involving alcohol, pornography, gambling, weaponry, speculation, or interest-based transactions.
According to the Revised Regulation on Investment of Pension Fund Assets, PenCom stated:
“Fund VI assets shall not be invested in the production or trading of alcohol, pornography, weaponry, gambling/betting, speculation, or interest-earning ventures and other ventures of a similar nature contrary to Shari’ah principles.”
It added that investments in Fund VI for active RSA contributors would be managed under the Wakala Bil-Istithmar (investment agency) principle, while retirees opting for the fund would operate under Mudarabah, a profit-sharing and loss-bearing partnership model.
The commission also noted that investments under Fund VI must avoid excessive risk or uncertainty (known as Gharar under Islamic law). The fund’s assets can be invested in government and corporate sukuk, Shari’ah-compliant money market instruments, and other approved ethical products.
Beyond Fund VI, the PenCom report showed steady growth across all the pension funds within the Contributory Pension Scheme.
- Fund I, the most conservative, grew by 79 per cent from ₦217.03 billion to ₦389.15 billion.
- Fund II, which accommodates most active RSA contributors, increased by 25 per cent, rising from ₦8.73 trillion to ₦10.9 trillion.
- Fund III, the pre-retirement fund, recorded a 23 per cent increase, from ₦5.59 trillion to ₦6.88 trillion.
- Fund IV, designed for retirees, expanded by 25 per cent, from ₦1.51 trillion to ₦1.89 trillion.
- Fund V, the Micro Pension Fund (now rebranded as the Personal Pension Plan), jumped 63.5 per cent from ₦968.27 million to ₦1.58 billion, reflecting growing inclusion of informal sector workers.
The Pension Fund Operators Association of Nigeria (PenOp) described the overall performance as a sign of growing confidence in the pension industry and improved fund management.
“Fund VI recorded the highest growth rate at about 157 per cent, soaring from ₦70.63 billion to ₦181.23 billion, highlighting its aggressive investment strategy and high return potential,” PenOp said.
It added that the consistent rise across all funds underscores increased contributions by pension members and the effective management of diversified investment portfolios by Pension Fund Administrators (PFAs).
Meanwhile, Nigeria’s total pension fund assets have crossed the ₦25 trillion mark, reaching ₦25.89 trillion as of August 2025, compared to ₦21.13 trillion in August 2024 — a 22.5 per cent year-on-year increase.
Industry analysts say the robust growth points to improved compliance with the pension law, enhanced investment diversification, and rising interest among contributors seeking stable, long-term retirement security.
