2019 Pension Industry Report

Overview of the Pension Industry Report

At the end of 2018, the Global Pension Industry had an estimated asset under management (AuM) of $41.4 trillion which represents 53.9% of global assets under management. This significant asset size reflects the growing institutionalisation of retirement planning across the world. In the same period, Nigeria’s Pension fund stood at ₦8.6 trillion ($23.9 billion), 13.4% higher than the previous year and represents a 17.6% compounded annual growth rate (CAGR) over the past three years.

In the past three years, competition in the Pension Industry has been intensive, exacerbated with the introduction of the Micro-Pension Scheme. In assessing the industry’s competitive landscape, we analysed key parameters including: market share of AuMs, market share of enrolees, percentage growth in AuMs, absolute growth in AuMs, and AuMs per RSA holder for each operator with an overall industry ranking based on our findings.

Investment returns in the Nigeria Pension Industry averaged 9.4% in 2018, with only eight operators outperforming the Industry average. This represents a significant drop from the 16.2% average returns in 2017. As at 30 June, 2019 investment returns averaged 5.3%, and we expect this to ramp up to 11% driven by an upbeat capital market in the second half of the year.

Agusto & Co Pension Industry Survey also highlighted key considerations of enrolees in selecting and switching PFAs.  The survey identified operators that would likely emerge as net winners and losers when the transfer window is opened.

  • This report provides information on the Nigerian Pension Industry and provides a broad insight of the Industry’s operations.
  • It examines the Industry’s size, structure and competitive profile of operators. In addition, it outlines key competitive tools pertinent to the success of a Pension Fund Operators.
  • It reviews the financial condition of operators, as well as the fund performance of PFAs, highlighting critical factors that impact investment performance and profitability in the Industry.
  • It also provides an overview of the regulator and regulations guiding the Industry. It also reviews Nigeria’s regulatory environment vis-à-vis those of similar economies.

Benefits of the Pension Industry Survey

  • The survey highlights issues around service quality and its attendant effects on enrolees.
  • It outlines the Industry’s bases of competition through the eyes of enrolees.
  • It reveals the competitive profile of PFAs through the eyes of enrolees and informal sector operators.
  • The report identifies the elusive issues with on-boarding enrolees from the informal sector.
  • The report also captures the key frustrations of enrolees and factors that could lead to switching PFAs.