Pension Fund Administrators (PFAs) invested about N17.1 trillion of Nigerian pension assets in Federal Government securities during the first quarter of 2026.
The amount represents 58.07 per cent of the pension industry’s N29.5 trillion Net Asset Value (NAV), according to the latest report from the National Pension Commission (PenCom).
However, PenCom has warned that the heavy concentration in government securities may not deliver returns that consistently beat inflation over the long term. The warning comes as PFAs continue to favour Federal Government securities amid the high-yield environment in the money market.
While recognising government securities as an important investment option, the Commission said pension funds need greater diversification to achieve stronger long-term risk-adjusted returns.
PenCom stated: “With 58.07% of pension assets invested in Federal Government securities, greater diversification is needed to support stronger long-term risk-adjusted returns. The Commission will continue to supervise PFAs to ensure prudent, compliant management of pension assets in the best interests of members.”
The Commission stressed that Nigeria’s pension industry must remain financially sound, diversified and capable of withstanding economic shocks while serving members over the long term.
According to PenCom, the high allocation to Federal Government securities helps preserve capital and provide stable income but limits the system’s ability to generate inflation-beating returns.
The report noted growing interest in alternative investments. Mutual fund allocations increased by 47.84 per cent, while private equity rose by 8.76 per cent during the quarter. PenCom said the changes suggest that revised investment guidelines are beginning to influence how PFAs structure their portfolios.
The Commission expects the trend to strengthen during the second and third quarters as PFAs adjust their strategies under the addendum to the Regulations on Investment of Pension Fund Assets issued in December 2025.
Federal Government securities accounted for 58.07 per cent of NAV, down from 59.50 per cent at the end of 2025. Meanwhile, domestic equities increased from 14.41 per cent to 18.50 per cent, supported by the equity market rally.
Alternative assets rose to 3.95 per cent, covering mutual funds, private equity, real estate and REITs.
Can greater pension portfolio diversification help Nigerian retirees protect their savings against inflation?
