Inflation poses risks to pension assets – Agusto & Co

<p>Job losses and rising inflation are posing significant risk to the pension industry, Agusto & Co has disclosed.</p>, <p>The firm also predicted in a new report that pension assets would hit N19tn in 2024.</p>, <p>It revealed this in a new report titled, ‘The Nigerian pension industry – Unlocking potential amidst economic uncertainties.’</p>, <p>While noting growth in the sector, it said the growth could be impeded by increased emigration and more.</p>, <p>The firm stated that, “However, it is critical to recognise that increased emigration, job losses, and rising inflation may pose a significant risk to our projections.</p>, <p>“These factors have the potential to impede pension asset growth by delivering negative real returns on investments.”</p>, <p>According to the firm, pension assets are supposed to grow by 13 per cent year-on-year, and hit N19tn by the end of 2024, due to growth across certain verticals.</p>, <p>It said, “Going forward, Agusto & Co. foresees a 13 per cent year-on-year growth in the pension industry’s AuM, propelling the total pension assets to an impressive N19tn by the end of 2024.</p>, <p>“We envision that this growth will be supported by an anticipated increase in rates on fixed-income securities, specifically bank placements, and a continued upswing in the stock market.”</p>, <p>The firm disclosed that Nigeria had the second-largest pension industry on the continent with assets under management hitting N16.1tn ($34.9bn) as of May 13, 2023.</p>, <p>It stated that the 13.5 per cent growth witnessed in the value of assets under management was fueled by robust investment returns, and to a lesser extent, by additional contributions.</p>, <p>Commenting on the growth of the number of contributory pension members, the firm said, “As a result, the total membership of the Contributory Pension Scheme reached 9.9 million RSA enrollees as of 31 May 2023, reflecting a three per cent growth compared to the corresponding period.</p>, <p>“The upswing in the number of enrollees can be attributed to th