By David Akinmola
Millions of Nigerian workers and retirees saw the value of their retirement savings shrink in June after pension assets fell by N624 billion to N30.7 trillion, as a broad sell-off in equities and weaker returns from fixed-income securities dented pension fund performance amid persistent market volatility.
The latest pension Industry Performance Report released by the National Pension Commission (PenCom) showed that total pension assets fell to N30.70 trillion in June from N31.32 trillion in May, representing a 2.0 per cent month-on-month decline.
However, the assets remained 24.64 per cent higher than the N24.63 trillion recorded in June 2025, indicating that the industry added about N6.08 trillion to its assets base over the past 12 months.
The June decline reflected losses in domestic equities and lower valuations across several fixed-income asset classes, underscoring the impact of the recent correction in the Nigerian capital market on pension portfolios.
Domestic equities, which accounted for 19.24 per cent of total pension assets and ranked as the second-largest asset class after Federal Government securities, declined by 8.76 per cent month-on-month to N5.91 trillion.
Despite the setback, the asset class remained one of the strongest performers over the past years, posting an impressive 91.74 per cent year-on-year growth.
The downturn followed widespread sell-offs on the Nigerian Exchange (NGX), which reduced the mark value of pension funds’ equity investments and temporarily weakened the value of Retirement Savings Accounts(RSAs)
Although the market correction affected contributions’ balances, financial experts maintained that the losses remain largely unrealized and could be reversed when equity prices recover.
Federal Government securities retained their position as the largest asset class, accounting for 56.69 per cent of total pension assets.
Investments in the category slipped marginally by 0.43 per cent to N17.40 trillion in June from N17.48 trillion in May but remained 14.61 per cent higher than the corresponding period of last year.
Treasury Bills rose marginally by 0.10 per cent month-on-month to N1.13 trillion and recorded an 81.33 per cent year-on-year increase, reflecting sustained investor interest in short-term government securities amid attractive yields.
Similarly, investments in state government securities declined by 2.28 per cent to N353.3 billion, although they remained 46.04 per cent above the level recorded a year earlier.
penCom’s report showed that while major asset classes posted declines curing the month, investments in private equity, corporate infrastructure bonds, open and closed-end funds as well as foreign money market instruments recorded positive performance.
The report also indicated that pension assets remained heavily concentrated in Federal Government securities and Fund II, although both segments recorded declines during the review period.
Market analysts said the June correction highlights the growing influence of the capital market on Nigeria’s Contributory Pension Scheme (CPS), where Pension Fund Administrators (PFAs) have become among the largest institutional investors.
Over the year, PFAs have gradually increased investments in listed equities, infrastructure funds, corporate bonds and alternative assets in line with PenCom’s investment guidelines to improve long-term returns amid inflationary pressures and declining real yields on fixed-income instruments.
Industry stakeholders, however, cautioned against interpreting the monthly decline as a permanent erosion of retirement savings, noting that pension investments are designed to deliver returns over decades rather than short-term market cycles.
Meanwhile, PenCom’s Director-General, Ms. Omolola Oloworaran, attributed the industry’s sustained long-term growth to stronger enforcement of the Contributory Pension Scheme across the public and private sectors.
Speaking during a State House briefing to mark her second year in office, she disclosed that pension assets had grown from N20.79 trillion to N31.48 trillion over the past two years, representing an increase of more than N10.7 trillion, or 51 per cent.
According to her, renewed confidence in the pension system has also boosted compliance, with the commission recovering more than N36 billion in unremitted pension contributions from defaulting employers during the period, compared with N28 billion recovered in all previous years.
She added that aggregate monthly pension payments rose by 22 per cent from N12.2 billion to N14.9 billion, while over 100,000 eligible retires from treasury-funded Ministries, Departments and Agencies benefited from the N32,000 monthly consequential pension adjustment.
Oloworaran also said pensioners under the Nigeria Social Insurance Trust Fund(NSITF), whose benefits had remained unchanged for two decades, now receive about N206,000 monthly following the review, with all outstanding arrears fully settled.
She maintained that despite short-term market fluctuations, the continued expansion of pension assets and improved compliance reflect growing confidence in Nigeria’s pension industry and the long-term resilience of the Contributory Pension Scheme.
