PFAs Channel 62% of Workers’ Pensions into Govt Bonds
Nigeria’s pension industry is still betting big on the government. Pension Fund Administrators (PFAs) have invested ₦14.5 trillion of workers’ retirement savings into Federal Government securities as of March 2025.
That’s 62% of total pension assets (₦23.3 trillion)!
Key Highlights
1️⃣ FGN Securities Still Dominate
• Govt bonds & treasury bills remain the backbone of pension funds.
• Between June 2023 and March 2025, PFAs added ₦3.62 trillion to FGN debt.
• However, their overall portfolio share dropped slightly (from 64.8% → 62.1%).
2️⃣ Bond & T-Bill Growth
• Bonds: from ₦10.4tn → ₦13.8tn (+32.6%).
• Treasury bills: from ₦192bn → ₦593bn (+208%).
3️⃣ Declines in Other Govt Instruments
• Sukuk: ₦152bn → ₦95bn (–38%).
• Green bonds: ₦97bn → ₦2.5bn (–97% ).
• Agency bonds: also fell sharply.
What’s Rising Besides Govt Debt?
• Equities (Stocks): doubled from ₦1.27tn → ₦2.57tn (+103%). Share of pension assets rose from 7.6% → 11%.
• Corporate Debt: ₦1.88tn → ₦2.35tn (+25%).
• Commercial Papers: ₦171bn → ₦250bn (+47%).
• Private Equity: ₦43bn → ₦164bn (+282% ).
• Infrastructure Funds: ₦127bn → ₦234bn (+84%).
Still, these “alternatives” make up less than 3% of total assets.
⚠️ The Big Concern
Even though PFAs are growing, inflation (averaging 20%+) is eating into real returns.
• On paper: pension funds are earning positive returns.
• In reality: after adjusting for inflation, workers’ savings are losing value.
Industry experts are calling for more diversification → into equities, infrastructure, and alternative assets — instead of relying almost entirely on government borrowing.
️ Voices from the Industry
• PenCom: pushing PFAs to diversify into alternative assets (like infra & private equity).
• Experts: say only stronger investment performance can protect savings from inflation.
• PFAs: remain cautious, prioritizing “capital safety” over higher but riskier returns.
What This Means for Workers
• ✅ Your pension money is relatively “safe” since most of it is in govt debt.
• ❌ But inflation means the real value of your pension may shrink.
• Future sustainability depends on PFAs balancing safety (bonds) with growth (stocks, infra, alternatives).
Bottom line: Nearly 2 out of every 3 pension naira is funding government borrowing. While safe, this conservative play may not beat inflation unless PFAs diversify further.
Nigeria’s pension industry is still betting big on the government. Pension Fund Administrators (PFAs) have invested ₦14.5 trillion of workers’ retirement savings into Federal Government securities as of March 2025.
That’s 62% of total pension assets (₦23.3 trillion)!
Key Highlights
1️⃣ FGN Securities Still Dominate
• Govt bonds & treasury bills remain the backbone of pension funds.
• Between June 2023 and March 2025, PFAs added ₦3.62 trillion to FGN debt.
• However, their overall portfolio share dropped slightly (from 64.8% → 62.1%).
2️⃣ Bond & T-Bill Growth
• Bonds: from ₦10.4tn → ₦13.8tn (+32.6%).
• Treasury bills: from ₦192bn → ₦593bn (+208%).
3️⃣ Declines in Other Govt Instruments
• Sukuk: ₦152bn → ₦95bn (–38%).
• Green bonds: ₦97bn → ₦2.5bn (–97% ).
• Agency bonds: also fell sharply.
What’s Rising Besides Govt Debt?
• Equities (Stocks): doubled from ₦1.27tn → ₦2.57tn (+103%). Share of pension assets rose from 7.6% → 11%.
• Corporate Debt: ₦1.88tn → ₦2.35tn (+25%).
• Commercial Papers: ₦171bn → ₦250bn (+47%).
• Private Equity: ₦43bn → ₦164bn (+282% ).
• Infrastructure Funds: ₦127bn → ₦234bn (+84%).
Still, these “alternatives” make up less than 3% of total assets.
⚠️ The Big Concern
Even though PFAs are growing, inflation (averaging 20%+) is eating into real returns.
• On paper: pension funds are earning positive returns.
• In reality: after adjusting for inflation, workers’ savings are losing value.
Industry experts are calling for more diversification → into equities, infrastructure, and alternative assets — instead of relying almost entirely on government borrowing.
️ Voices from the Industry
• PenCom: pushing PFAs to diversify into alternative assets (like infra & private equity).
• Experts: say only stronger investment performance can protect savings from inflation.
• PFAs: remain cautious, prioritizing “capital safety” over higher but riskier returns.
What This Means for Workers
• ✅ Your pension money is relatively “safe” since most of it is in govt debt.
• ❌ But inflation means the real value of your pension may shrink.
• Future sustainability depends on PFAs balancing safety (bonds) with growth (stocks, infra, alternatives).
Bottom line: Nearly 2 out of every 3 pension naira is funding government borrowing. While safe, this conservative play may not beat inflation unless PFAs diversify further.