{"id":391367,"date":"2026-04-22T01:55:21","date_gmt":"2026-04-22T01:55:21","guid":{"rendered":"https:\/\/www.newsbeep.com\/nz\/391367\/"},"modified":"2026-04-22T01:55:21","modified_gmt":"2026-04-22T01:55:21","slug":"pension-returns-match-inflation-for-first-time-in-seven-years","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/nz\/391367\/","title":{"rendered":"Pension returns match inflation for first time in seven years"},"content":{"rendered":"

Pension returns in Nigeria are beginning to catch up with inflation for the first time in seven years, signalling a potential turning point for contributors who have endured years of eroded real value in their retirement savings.<\/p>\n

Omolola Oloworaran, director-general of the National Pension Commission (PenCom), said recent reforms in the investment framework are starting to yield results, with fund performance now aligning more closely with macroeconomic realities.<\/p>\n

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\u201cPension returns on investment are now closing up on inflation for the first time in seven years as at March 2026\u201d Oloworaran said, noting that the shift reflects deliberate policy adjustments aimed at strengthening the resilience of the pension system.<\/p>\n

Data from the National Bureau of Statistics shows headline inflation rose to 15.38 percent in March from 15.06 percent in February, while returns on pension investment stands at around 17 percent, according to industry analysts.<\/p>\n

According to her, inflation and currency devaluation had significantly undermined pension fund performance in recent years, prompting the Commission to recalibrate its investment strategy. This included a review of regulations and a broader asset allocation framework that allows pension fund administrators to deploy more capital into inflation-hedged instruments.<\/p>\n

\u201cWe realized that inflation and currency devaluation have negatively affected pension funds, so we reviewed the investment regulations last year. We also increased allocations across various asset classes, particularly to real assets such as infrastructure, where pension funds can be invested to provide a hedge against inflation.\u201d<\/p>\n

\u201cWe increased allocations to various asset classes, particularly real assets such as infrastructure, where pension funds can be invested to provide a hedge against inflation,\u201d she said.<\/p>\n

She said beyond asset diversification, PenCom also introduced new financial instruments to enhance returns. These include securities lending and repurchase agreements (repos), designed to deepen market participation and create additional income streams for pension funds.<\/p>\n

Oloworaran explained that the combined effect of these measures is gradually improving yield performance, bringing returns closer to, and in some cases above, prevailing inflation levels.<\/p>\n

\u201cThis is to ensure that we optimize returns and are able to catch up with inflation. The indication is that these reforms are working,\u201d she said.<\/p>\n

The development marks a significant milestone for Nigeria\u2019s pension industry, which has struggled to deliver positive real returns amid persistent macroeconomic pressures. Analysts say sustained alignment between returns and inflation could help rebuild contributor confidence and strengthen long-term participation in the contributory pension scheme.<\/p>\n

PenCom said it will continue to refine its investment policies while also pursuing broader reforms, including expanding pension coverage, to deepen the industry and enhance retirement security for Nigerians.<\/p>\n

PenCom in a revised investment guidelines released last year ushered the industry into a new era of diversification that enabled Pension Fund Administrators to enhance contributors\u2019 returns.<\/p>\n

The revised rules reduce over-dependence on federal government securities and allow pension fund administrators to explore a wider range of instruments, including exchange-traded derivatives, gold safekeeping receipts, agricultural funds, and repurchase agreements.<\/p>\n

The latest iteration of investment regulations reflects the changing investment landscape, according to analysts at Pension Fund Operators Association of Nigeria (PenOp).<\/p>\n

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\u201cWith a focus on reducing the exposure to federal government securities, PenCom have allowed pension funds to invest in more exotic financial instruments, the analysts said.<\/p>\n

Exchange Traded Derivatives (ETDs), one of the instruments, allow funds to profit or protect against market swings without buying the actual stocks or bonds.<\/p>\n

Exchange-traded derivative contracts, according to Fintelligents, are traded in regulated exchanges. They mostly consist of options and futures and can be used to hedge or speculate on a wide range of assets like currencies, interest rates, etc.<\/p>\n

Exchange-traded derivatives, therefore, foster liquidity and transparency by offering market-based price quotes. As an alternative approach to standardisation, over-the-counter derivatives are traded individually and customised to meet each party\u2019s requirements, thereby minimising transparency.<\/p>\n

Repurchase Agreements (Repos) are like short-term, safe loans where banks pay interest on money you lend, secured with assets. It is a transaction in which one party sells securities to another with an agreement to repurchase them at a specified future date and price, PenCom said.<\/p>\n

Gold Safe Keeping Receipts (GSRs) let you invest in gold without physically holding it, helping diversify your pension.<\/p>\n

Agricultural Funds invest in farms and agribusinesses, letting your money grow while supporting Nigeria\u2019s food production. Securities lending, where pension funds can temporarily lend securities like government bonds or equities to earn extra income.<\/p>\n","protected":false},"excerpt":{"rendered":"Pension returns in Nigeria are beginning to catch up with inflation for the first time in seven years,…\n","protected":false},"author":2,"featured_media":391368,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[202379,138,246,111,139,69,2180,244,245],"class_list":{"0":"post-391367","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-bdlead","9":"tag-business","10":"tag-finance","11":"tag-new-zealand","12":"tag-newzealand","13":"tag-nz","14":"tag-pension","15":"tag-personal-finance","16":"tag-personalfinance"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/391367","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=391367"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/391367\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/391368"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=391367"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=391367"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=391367"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}