In a concerning trend, some of Nigeria’s leading companies have failed to meet pension contribution compliance standards for 2023, contributing to a noticeable decline in the average pension remitted per employee. According to recent analysis, while an average of N1,154,759 was remitted per employee in 2022, this figure dropped significantly to just N140,194 in 2023.
The failure to meet compliance standards in 2023 is largely attributed to the absence of several prominent firms from the 2024 pension compliance list. Major companies like MTN Nigeria, Julius Berger, Stanbic Group, Zenith Bank, FCMB Group, and Access Holdings, which have traditionally made significant contributions to the pension funds, are notably missing from this year’s list. Their absence has caused a significant reduction in the overall pension remittances and the number of employees benefiting from the scheme.
For instance, MTN Nigeria, which was listed on the 2023 compliance list, remitted N2.72 billion for 1,732 employees in 2022, averaging N1.57 million per employee. However, this contribution does not appear on the 2024 list for the 2023 remittance year. Similarly, construction firm Julius Berger, which remitted N2.73 billion on behalf of 12,796 employees in 2022, has also been omitted from the 2024 list.
Financial institutions like Stanbic IBTC Holdings, which made substantial contributions in 2023, have also failed the compliance test for 2024. In 2023, Stanbic IBTC Holdings remitted N276.95 million on behalf of 293 employees, but it is not included in this year’s compliance list.
In the banking sector, Zenith Bank, which contributed N3.63 billion in 2022 for 9,066 employees, is another major player absent from the list. FCMB Group and its subsidiaries, despite making significant remittances in previous years, are also missing from the 2024 compliance list.
Despite the non-compliance by these blue-chip companies, Nigeria’s pension industry has seen significant growth, with total pension assets in the country rising to N18.36 trillion by December 2023. This represents a 22.4% increase from N14.99 trillion in 2022.
The breakdown of Nigeria’s pension assets as of December 2023 is as follows:
- FGN Securities: N11.92 trillion
- Corporate Debt Securities: N1.91 trillion
- Money Market Instruments: N1.67 trillion
- Domestic Ordinary Shares: N1.57 trillion
- Foreign Ordinary Shares: N202.18 billion
- Infrastructure Fund: N143.37 billion
- Real Estate: N263.44 billion
- Private Equities: N71.766 billion
- Cash and Other Assets: N220.13 billion
The various pension funds, including CPFAs and other specific funds, have collectively contributed to this growing pool of assets, which now supports a robust pension scheme in the country.
While the National Pension Commission (Pencom) has yet to respond to inquiries regarding the omission of these companies from the compliance list, it is known that during its half-year 2023 surveillance, Pencom identified lapses in some operators’ services, including uncredited contributions and issues with the maintenance of contributors’ records. These issues are being addressed by the pension operators.
