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2023 PFA Corporate and Pension Fund Accounts for the year ended December 2022 – Norrenberger Pensions

Background.

Norrenberger Pensions Limited acquired IEI-Anchor Pension Managers. The name of the company was then changed to Norrenberger Pensions Limited.

As of 31 December 2021, the company had shareholders’ funds of just slightly over ₦1.41 billion, as such needed to recapitalise before the deadline of the last regulator-induced recapitalisation exercise. As of December 31, 2022, the company had increased its shareholders' funds to close at just slightly over ₦5.0 billion.

Analysis:

Norrenberger Pensions ended the 2022 financial year with 159,121 RSA holders in the 6 publicly available RSA funds, an increase of 7,348 RSA holders from 151,773 in 2021. Additionally, assets under management for the 6 audited Retirement Savings Accounts (RSAs) funds published was ₦91.73 billion, up 24% from ₦73.73 billion in 2021.

Performance Analysis: Company

Company revenue for the year ended December 31, 2022, was up 35% to ₦1.22 billion, compared to ₦984 million in 2021. Total expenses rose by 78% to ₦1.68 billion, from ₦948 million in 2021. This led to a rise in the company’s cost-to-income ratio from 96% to 126%, an all-time high, taking it above the prior 5-year average of 97% to now stand at a new 5-year average of 103%.

The company incurred a loss after tax of ₦425.79 million for 2022, compared to a profit after tax in 2021 of ₦34.99 million. Shareholders' funds grew to ₦5.0 billion in 2022 from ₦1.41 billion in 2021. Return on equity on the closing capital and average capital was negative.

Performance Highlights: Norrenberger RSA Funds (audited)

For the year ended 31 December 2022, the Norrenberger Pensions Fund I appreciated by 5.12%, Fund II appreciated by 8.42%, Fund III by 9.27%, Fund IV by 9.06%, Fund V by 6.96% and Fund VI – Non-Interest (Active) was only a partial year with no closing audited unit price for the fund. The company offers 6 of the 7 PenCom approved funds to the public.

The pension industry does not currently benchmark the performance of any fund to any performance index. In the absence of any benchmark index to measure/compare fund performances for the year 2022, and to aid readers indirect comparison, the NGX All-Share Index (a measure of performance of the Nigerian stock market) appreciated by 19.98%, the NGX Pension Index appreciated by 16.96%, inflation was 21.47% and MPR closed the year at 16.50%, having risen steadily through the year. 

Norrenberger Pensions Fund I highlights:

·      Fund performance: up 5.12% in 2022, higher than the 1.61% in 2021 but lower than the 27.70% in 2020 and 11.28% in 2019.

·      Fund income was up 134% to ₦43.59 million in 2022, from ₦18.66 million in 2021 but 47% below 2020.

·      Net gains from investing activities rose 214% to ₦27.80 million in 2022, up from ₦8.87 million in 2021, but down by 63% on the ₦75.64 million in 2020.

·      Fund size: the size of the fund, measured by net assets, grew 9% to ₦587.29 million from ₦536.62 million.

·      Fund expense ratio (cost of managing the fund) was 2.69% in 2022, up from 1.82% in 2021.

·      Asset Allocation as of 31-12-2022: DNA.

·      Performance ranking: The fund performance for 2021 was ranked 17 out of 19 in our 2022 Annual Report on Pensions.

Norrenberger Pensions Fund II highlights:

·      Fund performance: up 8.42% in 2022, compared to 2.05% in 2021 and 25.32% in 2020 and a 5-year average of 11.36%.

·      Fund income was up almost 192% to ₦6.23 billion in 2022. Though this was up on the ₦2.14 billion in 2021, it was below the ₦10.53 billion of 2020.

·      Net gains from investing activities was ₦4.89 billion in 2022, up 288% in 2021 which was ₦1.26 billion but ₦9.78 billion in 2020.

·      Fund size: Fund II grew almost 19% to ₦65.55 billion from ₦55.29 billion in 2021 and ₦48.48 billion in 2020.

·      Fund expense ratio: Cost of managing the fund came in at 2.04% in 2022, up from 1.60% in 2021 and 1.54% in 2020.

·      Asset Allocation as of 31-12-2022: DNA.

·      Performance ranking: The fund performance for 2021 was ranked 18 out of 19 in our 2022 Annual Report on Pensions.

Norrenberger Pensions Fund III highlights:

·      Fund performance: was 9.27% in 2022, compared to 7.97% in 2021 and 15.25% in 2020.

·      Fund income was up 60% to ₦1.97 billion in 2022 from ₦1.23 billion of 2021 and ₦1.47 billion of 2020.

·      Net gains from investing activities in 2022 was ₦1.58 billion, up 54% from ₦1.02 billion in 2021. 2020 was ₦1.32 billion.

·      Fund size: Fund III grew 47% to ₦22 billion from ₦15 billion in 2021.

·      Fund expense ratio was up to 1.75% in 2022, from 1.36% in 2021 and 1.45% in 2020. The fund has a 4 year average of 1.67%. The lower this ratio the better for RSA holders.

·      Asset Allocation as of 31-12-2022: DNA.

·      Performance ranking: The fund performance for 2021 was ranked 10 out of 19 in our 2022 Annual Report on Pensions.

Norrenberger Pensions Fund IV highlights:

·      Fund performance: up 9.06% in 2022, compared to 7.75% in 2021 and 14.43% in 2020.

·      Fund income: ₦324.48 million in 2022, up 21% from ₦267.59 million in 2021. Both down on the ₦351.25 million in 2020.

·      Net gains from investing activities: ₦274.23 million in 2022, up 31% from ₦208.62 million in 2021. 2020 was ₦311.10 million.

·      Fund size: Fund IV grew 18% to ₦3.41 billion, from ₦2.89 billion in 2021 and ₦2.66 billion in 2020.

·      Fund expense ratio was a high 1.47% in 2022, though down on the 2.04%% of 2021 and the 1.51% of 2020.

·      Asset Allocation as of 31-12-2022: DNA.

·      Performance ranking: The fund performance for 2021 was ranked 11 out of 19 in our 2022 Annual Report on Pensions.

Norrenberger Pensions Fund V highlights:

·      Registered Fund V RSA holders: Norrenberger Pensions had 3,244 Fund V RSA holders as of 31 December 2022, up from 3,175 in 2021. Total industry Micro Pension RSA holders in 2022 were 89,327, giving Norrenberger Pensions a 3.63% market share.

·      Total assets in the fund: ₦8.68 million in 2022, up 9% from ₦7.95 million in 2021.

·      Fund income: Net fund income for the fund was ₦723,000 in 2022, up from ₦431,000 in 2021.

·      Net gains from investing activities were ₦597,000 in 2022, up from ₦372,000 in 2021.

·      Fund performance was 6.96% in 2022 compared to 3.16% in 2021.

·      Performance ranking: The fund performance for 2021 was ranked 13 out of 14 in our 2022 Annual Report on Pensions.