Pension Fund Administrators (PFAs) invested about N17.1 trillion of Nigeria’s pension assets in Federal Government securities as of March 31, 2026, highlighting the continued dominance of government debt in pension portfolios.
According to the National Pension Commission’s (PenCom) Q1 2026 Quarterly Industry Report, Federal Government securities accounted for 58.07% of the pension industry’s N29.52 trillion Net Asset Value (NAV) at the end of the first quarter.
The allocation, equivalent to roughly N17.1 trillion, made Federal Government securities the largest asset class in the pension industry, although its share declined from 59.50% at the end of December 2025.
PenCom said the high concentration in government securities underscores the need for PFAs to diversify their portfolios to improve long-term risk-adjusted returns.
“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 stated in its Q1 report.
PenCom also warned that while government securities remain an important investment channel for pension funds, their ability to consistently generate returns above inflation over long periods could be limited.
The regulator said it would continue to supervise PFAs to ensure pension assets are managed prudently and in the best interests of pension contributors.
The call for diversification comes as pension assets continued to expand during the first quarter. PenCom reported that total pension industry NAV increased from N27.45 trillion at December 31, 2025, to N29.52 trillion by March 31, 2026.
Domestic equities recorded one of the largest changes in portfolio allocation during the quarter. PenCom reported that their share of pension assets increased from 14.41% at the end of 2025 to 18.50% by March 2026.
The Commission also reported increased exposure to alternative investments, whose combined allocation stood at 3.95% of pension assets. The category includes investments such as mutual funds, private equity, real estate and real estate investment trusts.
Within the quarter, PenCom reported that pension-fund investments in mutual funds increased by 47.84%, while private-equity investments rose by 8.76%.
According to the Commission, the changes suggest that the revised investment guidelines issued in December 2025 are beginning to influence how PFAs construct their portfolios.
PenCom said it expects the diversification trend to gain momentum as PFAs continue adjusting their investment strategies under the revised framework.
The regulator’s concern is not that PFAs should abandon Federal Government securities, which remain a major component of pension portfolios, but that excessive concentration could constrain the industry’s ability to generate stronger long-term, inflation-adjusted returns.
PenCom said the pension system must remain financially sound, well diversified and resilient to economic shocks to protect contributors and meet its long-term obligations.
The Q1 2026 figures therefore point to a gradual shift in pension-fund allocation, with government securities still accounting for the majority of assets while equities and alternative investments gain a larger share of the portfolio.
