Assets holding and financial performance of pension fund administrators in Nigeria

Abstract

Pension funds are founded to ensure contributors benefit from regular or lump sum income upon
retirement. The financial performance of pension funds in Nigeria seems fraught with uncertainties, risk
and delay in payment of benefits thus raising doubts whether they can be able to achieve their primary
objective. This study was carried out to evaluate the relationship between assets holding and financial
performance of Pension Fund Administrators (PFAs) in Nigeria. 21 PFAs were examined under this study
through judgmental sampling. The study sourced secondary data from PFAs. The data collected relates to
investment in classes of asset and the investment reports on dividend income, interest income and rental
income. The data was analyzed using correlational statistics to determine if there is a significant statistical
difference in the asset classes and component of investment income. Assessments of association between
composition of the various pension fund portfolio and the amount of the various asset classes vis a vis the
investment income earned were also made to find out if diversification of the portfolio affects the financial
performance of the pension funds. The research revealed that the collection of assets by the PFAs affect
the financial performance of the pension funds. From the analysis it is clear that assets holding is positively
and statistically significant with the financial performance of PFAs. Therefore, it is very critical for PFAs to
consider the assets mix in the fund management without over-exposure to a particular asset.
Key words: assets holding, financial performance, pension fund administrators.