Best performing pension funds in Nigeria for February 2025

Updated Saturday 15 March 2025 15:30

In February 2025, the Nigerian pension sector had a range of results from various Retirement Savings Account (RSA) funds.

Trustfund Pensions Plc, OAK Pensions Limited, and Pension Alliance Limited lead the 16 Pension Fund Administrators (PFAs) in Nigeria that produced an average return of 1.64% for the four retirement savings accounts during the reviewed month.

This is in line with the information that Nairalytics, the research division of Nairametrics, has gathered and examined.

With several pension fund administrators (PFAs) providing competitive returns on investment, the Nigerian pension sector has grown significantly in recent years.

An analysis of the data revealed that, with a rise of 2.10%, the RSA I fund had the highest return during the reviewed month.

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The RSA II fund came next with 1.85%. Returns for RSA III and IV were 1.36% and 1.26%, respectively.

The most recent monthly performance data shows an intriguing pattern that is consistent with the risk-return tradeoff, which is a basic investing idea. According to this theory, investments with greater risk tend to give larger returns, whilst those with lesser risk tend to produce smaller returns.

RSA Fund I, which carries the highest amount of risk, had the highest return for the month, according to a detailed examination of the performance statistics.

On the other hand, the fund with the lowest risk profile, RSA Fund IV, had the lowest return. This result is in line with the multi-fund structure, which was created to provide a variety of investment choices with differing risk and return potential.

Top-performing administrators of pension funds based on RSA accounts

Based on their various Retirement Savings Account (RSA) funds, the top-performing pension fund managers for February 2025 are broken down below.

Due to insufficient information, CardinalStone Pensions' ARM Pension Managers Limited, Leadway Pensure PFA Limited, and Radix Pension Fund Managers Limited were excluded from this analysis.

With an average return of 2.73%, Pensions Alliance Limited topped the list of PFAs with the best average performance in February 2025. OAK Pensions Limited came in second with a return of 2.55%, and Trustfund Pensions Plc came in third with a return of 2.17%.

RSA Fund I

The largest allocation of hazardous or variable income instruments is found in this fund, and participation is only available upon formal request from a contributor; retirees and active contributors aged 50 and higher are not eligible. With 20% to 75% of its assets invested in variable income instruments, RSA Fund I's main objective is to optimize investment returns.

The RSA Fund With an average return of only 2.10%, I was the best performer during the examined month.

With a gain of 4.94% in February 2025, OAK Pensions Limited was the company with the greatest RSA Fund I return. Trustfund Pensions Plc, which saw a gain of 2.72% for the month, and Pension Alliance Limited, which saw a return of 4.68%, came next.

All 16 PFAs recorded a positive return in their RSA Fund I.

First: OAK Pensions Limited – 4.94%
Second: Pensions Alliance Limited – 4.68%
Third: TrustFund Pensions Plc – 2.72%

RSA Fund II

This is the default fund for RSA holders between the ages of 50 and 60 years. It is a conservative fund that is designed for contributors close to retirement and contributors with a low-risk appetite. Although it is suited for contributors between the ages of 50 and 60 years, younger contributors may opt to participate in this fund category.

OAK Pensions Limited led the pack with the highest RSA Fund III return, achieving 1.98%, followed by FCMB Pensions Limited with a gain of 1.77%. Trustfund Pensions Plc recorded a 1.65% return for the month.

In the review month, RSA Fund III delivered an average return of 1.36%.

First: OAK Pensions Limited – 1.98%
Second: FCMB Pensions Limited – 1.77%
-Trustfund Pensions Plc – 1.65%

RSA Fund IV

The RSA Fund IV is exclusively designed for retirees and members of Funds I, II, and III are not eligible to buy into Fund IV, except upon retirement.

Additionally, once members are in Fund IV, they are not permitted to move out of it. In the review month, RSA Fund IV delivered an average return of 1.26%, making it the least-performing fund category.

Oak Pensions topped the list with the highest RSA Fund IV return at 1.29%, followed by Tangerine Apt Pensions, which posted a gain of 1.27%. Norrenberger Pensions recorded a 1.21% gain for the month.

First: FCMB Pensions Limited – 1.51%
Second: Nigerian University Pension Management Company 1.50%
Third: AccessARM (formally Access Pensions) – 1.48%

Breakdown of industry investment

According to the most recent data from the National Pension Commission (PenCom), the industry assets rose to N22.51 trillion in December 2024 from N22.26 trillion recorded in November 2024.

The breakdown of the fund reveals that 62.7% of the total funds were invested in federal government securities such as FGN bonds, Treasury Bills, Sukuk bonds, etc.
Also, about 9.98% valued at N2.25 trillion was invested in corporate debt securities, while money market instruments accounted for 9.84% of the fund, with a value of N2.22 trillion.
Meanwhile, the local stockbroking firms N2.24 trillion of the pension fund assets, representing 9.96% of the entire fund, while mutual funds stood at N80.78 billion, representing 0.36% of the total fund.

In the same vein, total RSA registrations increased to 10.58 million as of the end of December 2024 from 10.19 million recorded as of the beginning of the year, representing a 3.84% full-year increase.

What you should know

The Multi-Fund structure is a system designed by the National Pension Commission (PenCom) to place RSA holders in one of four different funds based on their age and risk tolerance.

The RSA Fund I is an aggressive fund meant for active contributors who are 49 years old and below. Notably, the principal purpose of the fund is to maximize returns on investment, as about 20% to 75% of the funds are invested in variable income instruments.
RSA Fund II is a balanced fund with the intention of capital preservation while pursuing fair returns in the long term. Like the RSA Fund I, it is meant for active contributors who are 49 years and below, however, it is less risky as about 10% to 55% of the funds are invested in variable assets.
The RSA Fund III is a more conservative fund with the primary aim of capital preservation, with about 5% to 20% of the fund being invested in variable assets. It is the default fund for contributors who are 50 years and above.
RSA Fund IV, on the other hand, is a fund strictly for retirees and is mostly conservative. Up to 10% of the fund can be invested in variable income instruments.

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