Real Returns Remain Below Inflation for All RSA Pension Funds

– Advertisement –

Nigerian Pension Funds closed out 2025 with record balance-sheet expansion, yet the retirement landscape faces a credibility squeeze as the real returns on workers’ savings continue to trail behind the country’s high headline inflation rate.

According to the National Pension Commission (PenCom’s) latest performance report for the final quarter of 2025, total Net Asset Value (NAV) rose by 5.22% to hit ₦27.45 trillion ($18.1 billion), up by ₦1.36 trillion from the previous quarter. The accumulation was heavily supported by an aggressive 234.85% spike in public sector remittances, driven by the Federal Government clearing structural pension increments and legacy arrears.

However, behind the swelling asset base lies an ongoing macroeconomic challenge: over a rolling 36-month window, all Retirement Savings Account (RSA) Funds failed to outpace Nigeria’s average 17.4% headline inflation rate for the period. This persistent gap erodes long-term saver purchasing power, shifting total pressure onto newly issued, liberalized regulatory guidelines to reverse the trend.

Concentration in FGN securities at 59.50 % is the major culprit as it provides capital preservation but caps the system’s ability to deliver inflation-beating returns over the long horizon. PFA allocation to equities stood at 15.37% in the period.

The Two Structural Anomalies

PenCom’s year-end data exposed two distinct operational vulnerabilities that could undermine market credibility if left unaddressed in 2026:

The Personal Pension Plan Onboarding Illusion: While the industry has successfully marketed and registered 215,412 informal sector workers under the Personal Pension Plan (PPP), actual funding metrics are weak. An alarming 92% of registered accounts are dormant, meaning 198,092 accounts have received zero…