Pension Fund Administrators (PFAs) earned N125.39 billion in the financial year ended December 31, 2021, the National Pensions Commission of Nigeria (PenCom) said in a report. The Commission said the figure indicated an increase of 14.33 per cent, compared to the total income of N109.68 billion earned in 2020. PenCom stated that the total operating expenses of the PFAs amounted to N65.58 billion, as against N55.20 billion recorded in 2020, while gross operating profits in the industry increased from N54.78 billion in 2020 to N59.52 billion in 2021.
According to the Commission, the major source of income for the PFAs is fund management fees, which account for over 90 per cent of total income. It noted that the PFAs recorded a combined Return on Assets of 19.68 per cent and a Return on Equity of 25.44 per cent, which indicated that the PFAs sustained their profitability in the year under review. PenCom said the six Closed Pension Fund Administrators (CPFAs) generated total revenue of N3.65 billion, which was an increase of 19.67 per cent when compared with the total inflow of N3.05 billion generated in 2020.
The commission explained that the major source of inflows for the CPFAs were receipts from their sponsor companies, which constituted 65 per cent of their total revenue, while management fees and investment income accounted for 32 per cent and three per cent respectively. According to PenCom, the CPFAs incurred a total expenditure of N3.55 billion and a net gain of N92.44 million for the year ended Dec. 2021. It stated that the operating expenses comprised mainly of expenses on staff, which accounted for over 65 per cent of operating expenses.