The number of Retirement Savings Account (RSA) holders utilizing part of their pension savings to acquire residential mortgages surged by 65.03% quarter-on-quarter (QoQ), reaching 3,804 in the third quarter of 2024 (Q3’24). This marks a significant increase from the 2,305 recorded in the second quarter (Q2’24).
According to the Pension Industry Performance Dashboard released by the National Pension Commission (PenCom), the value of funds transferred for residential mortgage equity contribution rose by 81.2%, climbing to N32.62 billion in Q3’24 from N18 billion in Q2’24.
Equity contribution for residential mortgage refers to the portion of funds that an RSA holder can apply from their RSA balance toward securing a residential mortgage. Under existing regulations, RSA holders are allowed to utilize up to 25% of their balance for this purpose.
Growth in Pension Fund Assets and RSA Registrations
The report further revealed that total pension fund assets expanded by 4.4%, rising to N21.38 trillion in Q3’24 from N20.48 trillion in Q2’24. Additionally, total RSA registrations grew by 1.4% to 10.53 million, compared to 10.38 million recorded in Q2’23.
The report stated: “By Q3 2024, there were 10,536,088 registered RSAs, reflecting a growing adoption of the pension system. Notable highlights include 118,339 new RSA registrations in 2024 year-to-date, indicating continued awareness and inclusion efforts. Over the past five years, RSA registrations increased by 13.93%, from 9,215,788 in Q4’2020 to 10,499,358 in Q3’24. Of these, 61% were male, while 38% were female.”
Steady Growth in Pension Contributions
Cumulative contributions since the inception of the Contributory Pension Scheme (CPS) reached N10.97 trillion as of Q3’24. The public sector contributed N5.71 trillion, while the private sector accounted for N5.25 trillion.
“Pension contributions have witnessed significant growth over the past five years. Public sector contributions rose from N3.43 trillion to N5.71 trillion, while private sector contributions increased from N3.27 trillion to N5.25 trillion,” the report added.
Expansion of Micro Pension Scheme
The total Micro Pension Registration count since inception reached 164,031 in Q3’24. Within this segment, the number of informal sector workers with funded RSAs stood at 12,241. Between 2020 and Q3’24, funded RSA registrations increased by 5,971.
The total amount saved by Micro Pension Participants in their RSAs grew significantly to N967.19 million in Q3’24, representing a rise of N878.07 million from the 2020 figure of N89.13 million.
The growing reliance on pension savings for residential mortgage acquisition reflects an increasing awareness among Nigerians about utilizing their pension funds for long-term financial planning, particularly in the housing sector.
