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Business News of Thursday, 14 October 2021

Source: nairametrics.com

Oak, Sigma Pensions lead Nigerian Pension Fund Administrators in Q3 2021

Pension file photo Pension file photo

The Nigerian pension fund industry has grown more competitive in recent times since individuals can now easily move from one PFA to another. In the recent industry-based analysis, carried out by Nairametrics Research, the 20 PFAs with available data printed a 2.57% average returns on investment in Q3 2021.

This is according to data tracked by Nairametrics Research on the fund performances of Nigerian Pension Fund Administrators. The data used for this analysis was sourced from the websites of the various PFAs.

Also, the price of the funds as of 30th September 2021 was compared with that recorded as of 30th June 2021, to obtain the best performing funds in the Q3 period.

According to the analysis, Oak Pensions, Sigma Pensions, and First Guarantee Pension Limited were the best performing PFAs in the period under review, growing on the average by 3.45%, 3.17%, and 3.14% respectively.

APT Pensions and IEI-Anchor Pension Managers were not included in this report, due to incomplete data, while all efforts to obtain it directly proved unsuccessful.

A closer look at the data revealed that the RSA Fund I performed the best in the third quarter of the year, having recorded a 2.62% return on investment followed by RSA Fund II.

Overall Best PFAs in Q3 2021

The three best performing pension fund administrators for the third quarter of 2021 posted significant growth in their respective RSA funds. The best performers were obtained by averaging the percentage change in the various fund prices as of 30th June 2021 compared with that of 30th September 2021.

First Position: OAK Pensions Limited

Q3 2021 Return – 3.45%

Second Position: Sigma Pensions Limited

Q3 2021 Return – 3.17%

Third Position: First Guarantee Pension Limited

Q3 2021 Return – 3.14%

Best PFAs by Fund Category

Below is a list of the best performing pension funds in Nigeria in Q3 2021.

RSA Fund I

First Position: OAK Pensions Limited

Q3 2021 Return – 5.22%

Second Position: FCMB Pensions Limited

Q3 2021 Return – 3.25%

Third Position: NLPC Pension Fund Administration Limited

Q3 2021 Return – 3.24%

Others on the list include Sigma Pensions Limited (+3.12%), Investment One Pension Management Limited (+3.07%), and First Guarantee Pension Limited (+3.05%).

RSA Fund II

First Position: Investment One Pension Managers Limited

Q3 2021 Return – 3.68%

Second Position: First Guarantee Pensions Limited

Q3 2021 Return – 3.57%

Third Position: Sigma Pensions Limited

Q3 2021 Return – 3.47%

Others on the list include Nigeria Police Force Pensions Limited (+3.26%), Premium Pension Limited (+3.15%), and Trustfund Pensions Plc (+3.08%).

RSA Fund III

First Position: First Guarantee Pensions Limited

Q3 2021 Return – 3.12%

Second Position: Sigma Pensions Limited

Q3 2021 Return – 3.06%

Third Position: Pensions Alliance Limited

Q3 2021 Return – 2.96%

Others on the list include FCMB Pensions Limited (+2.89%), Nigeria Police Force Pensions Limited (+2.84%), and Oak Pensions (+2.74%).

RSA Fund IV

First Position: Sigma Pensions Limited

Q3 2021 Return – 3.03%

Second Position: Nigeria Police Force Pensions Limited

Q3 2021 Return – 3.01%

Third Position: First Guarantee Pension Limited

Q3 2021 Return – 2.84%

Others on the list include; OAK Pensions Limited (+2.81%), Pensions Alliance Limited (+2.80%), and Fidelity Pension Managers Limited (+2.74%).

About multi-fund structure

The Multi-Fund structure is a framework that is designed to align the age and risk profile of the RSA holders into one of the four distinct funds.

RSA Fund I

It is an aggressive fund meant for active contributors that are 49 years and below. The principal purpose of the fund is to maximise returns on investment. Notably, 20% to 75% of the funds would be invested in variable income instruments. It is worthy of mention that clients are eligible to switch to Fund II or Fund III (once they attain the age of 50 years).

RSA Fund II

It is a balanced fund with the intention of capital preservation while pursuing fair returns in the long term. It is the default funds for active contributors who are 49 years and below. About 10% to 55% of the pension funds can be invested in variable income instruments. Also, active contributors who are 49 years and below can switch to Fund I based on their request.

RSA Fund III

This is more of a conservative fund, with the primary aim of capital preservation. About 5% to 20% of the funds would be invested in variable income instruments. It is the default fund for contributors who are 50 years and above. Active contributors can switch to Fund II upon request.

RSA Fund IV

This is a fund strictly for retirees and mostly conservatives. About 10% of the fund can be invested in variable income instruments. Meanwhile, contributors under this fund category are not eligible to move to other fund types.

Why this matters

The increased competition, recorded in the pensions industry is a result of the transfer window, which allows pension contributors to switch from one PFAs to another if they choose to. This has intensified their efforts towards yielding competitive returns for their contributors. Meanwhile, Nairametrics had reported that Stanbic and VG Pensions led the performance chart of PFAs between January and July 2021.

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