A 4,254 percent surge in employees’ pensions remitted by Stanbic IBTC Bank accounted for the largest share of the pensions remitted by all the compliant Nigerian firms in 2022, putting the tier-two bank ahead of firms such as Julius Berger, MTN Nigeria, and Dangote Cement that traditionally remit the most pensions on behalf their employees.
According to the latest pension compliant list published by PENCOM in January 2023, employees’ pensions remitted by Stanbic IBTC Bank in 2022 was N66.97 billion on behalf of 1,905 employees, as against N1.54 billion remitted in 2021 for the same number of employees, and N1.53 billion remitted in 2020 on behalf of 2,093 employees.
Julius Berger remitted N2.73 billion just as MTN Nigeria remitted N2.72 billion in 2022. Dangote Cement with N1.899 remittance, and Flour Mills of Nigeria which remitted N1.78 billion complete the list of the top five firms that remitted the most pensions in 2022.
Collectively, all the compliant firms remitted N97.64 billion in 2022 which was 8.1 percent lower than the N106.24 billion remitted by compliant firms in 2021. Stanbic IBTC Bank was responsible for 68.8 percent of all pension remittances in 2022, our analysis showed.
A financial expert who pleaded anonymity attributed the huge pension remittances by Stanbic IBTC Bank to either the acquisition of pension liabilities of another firm or an inter agency transfers.
He said: ”The increase is significant. It was either Stanbic IBTC Bank acquired pension liabilities of another firm or the transactions leading to the huge amounts remitted were inter agency transfers.”
The Nigerian Observer sought explanation for the unusual surge in the pensions remitted by Stanbic IBTC Bank in just one year (2022) which was not consistent with the patterns in the previous years. However, as at the time of filling this report, neither Stanbic IBTC Bank nor PENCOM responded to our enquiries.
The progress made in the nation’s pensions subsector followed a series of reforms and the introduction of stiffer penalties towards ensuring prompt remittance of employees’ monthly pension deductions by firms and government agencies.
The Economic and Market Research Unit of the Nigerian Observer further classified the firms on the compliant list as micro, small, medium and big enterprises (MSMEs), with a view to assessing how much each category of firms remitted.
In Nigeria, a firm is classified as a micro if it employs not more than nine workers. Small firms have between 10 and 49 employees; medium firms employ between 51 and 99 workers while large firms employ more than 100 workers.
In 2022, compliant micro firms remitted N795.22 million on behalf of 11,115 employees, which amounted to an average of N71,544.43 per employee. Small firms remitted N1.79 billion on behalf of 4,257 employees, representing an average of N422,550.50 remitted per worker.
Further analysis shows that medium firms remitted N1.65 billion in 2022 on behalf of 2,736 workers, translating to an average of N602,173.79 per employee.
On their part, large enterprises remitted N93.4 billion on behalf of 93,309 employees, representing an average of N1 million per employee in 2022.
As of December 2022, the total pension fund assets under management stood at N14.99 trillion, an increase of 11.7 percent over N13.42 trillion as of December 2021.
PENCOM stated that at the end of the fourth quarter of 2022, the Retirement Savings Account (RSA) Active Funds I, II, III and V accounted for 72 percent of the pension assets.
RSA Retiree Funds accounted for 8 percent; Closed Pension Fund Administrators (CPFAs) and Approved Existing Schemes (ASES) accounted for 10 percent each of the assets, while the share of Fund VI Active and Retiree was negligible as of December 2022.
The RSA Active Funds (I, II, III and V) comprise N7.161 trillion FGN securities, N1.367 trillion local money market securities, and N50.19 billion mutual funds.
The RSA Retiree Funds consist of N827.86 billion FGN securities, N169.78 billion local money market securities, and N0.49 billion mutual funds. CPFAs had N774.05 billion FGN securities, N193.20 billion local money market securities, and N18.07 billion mutual funds.
For AES, the FGN securities were worth N859.80 billion, with N225.67 billion local money market securities, as well as N13.55 billion mutual funds as of December 2022.
Fund VI Active and Retiree comprised N20.65 billion FGN securities, N9.69 billion local money market securities, and N0.51 billion mutual funds.