The Multi-fund Structure
Providing greater choice and control to contributors on how their pension funds are invested.
The Multi-fund Structure for RSA Funds was conceived by the National Pension Commission (PenCom) and implemented effective July 1, 2018, to align contributors’ risk appetite with their investment horizon, at every stage of their life cycle.
The Fund allocation was formerly RSA Active and RSA Retiree. With the introduction of the Multi-fund structure, the RSA Active became Fund II while RSA Retiree became Fund IV.
The Multi-fund Structure comprises Fund I, Fund II, Fund III and Fund IV (Retirees Fund); and the respective funds are distinguished by their overall exposure to variable income instruments and the age profile of the contributors.
By variable-income instruments, we refer to investments that provide the respective fund owners with a rate of return that is dynamic and determined by market forces.
Variable-income instruments provide investors with higher risk rewards.
Objectives
- Achieve optimum returns for contributors by aligning their pension savings with their individual risk/return profile.
- Provide investment portfolio choices to contributors.
- Enhance the safety of pension assets through adequate portfolio diversification
Benefits
- Provide greater choice and control to contributors on how their pension funds are invested.
- Increased investment in Alternative assets which will essentially protect against inflation and help to facilitate improved returns over the long term.
- Provide for investment strategies that will better diversify risk and sustain returns
Fund Membership
- Membership of Fund I - Strictly by formal request of RSA holder.
- Membership of Fund II - Active Contributors who are less than 50 years.
- Membership of Fund III - Active Contributors who are 50 years and above.
- Membership of Fund IV - Strictly for RSA retirees only.
Type of Fund Classes
| Fund Type | Fund Membership | Maximum exposure to variable income instruments | Risk Level | Objective |
|---|---|---|---|---|
| Fund I | Strictly by formal request from Active Contributors who are 49years and below. | 95% of Portfolio Value | High risk, with a greater allocation to variable income assets like equities | Designed for aggressive growth, Fund I aim for higher returns but carries a higher risk level |
| Fund II | The default fund for Active Contributors who are 49years and below. | 75% of Portfolio Value | Moderate risk, with a balanced allocation between fixed income and variable income assets | Provides a balanced growth opportunity with moderate risk and returns. Ideal for long term growth while maintaining stability |
| Fund III | For Active Contributors who are 50years and above. | 20% of Portfolio Value | Moderately Conservative | Designed to preserve capital while generating stable and predictable returns for contributors approaching retirement. The Fund prioritises income stability and reduced exposure to market volatility. |
| Fund IV (Retirees) | For Retiree Contributors who are 50years and above. | 10% of Portfolio Value | Conservative | Focused on capital preservation and steady income generation for retirees. The Fund seeks to safeguard accumulated retirement savings while providing consistent cash flows to meet post-retirement needs. |
| Fund V | Designated for contributors under the Micro Pension Scheme and divided into two categories: a Conservative Fund (Fund V – Conservative) and a Growth Fund (Fund V – Growth). | Conservative: 5% of Portfolio Value Growth: 45% of Portfolio Value | Passive | Structured to meet the needs of contributors under the Micro Pension Scheme by offering simplified investment options. |
| Fund VI (Active) | Strictly by formal request from contributors in Funds I, II and III who have elected to move their contributions to Fund VI and who choose to have their pension contributions invested in Non-Interest Money and Capital Market Products. | 75% of Portfolio Value | Moderately Aggressive | Aimed at contributors who prefer non-interest investment instruments, the Fund seeks to achieve competitive long-term returns through diversified investments in Shariah-compliant instruments. |
| Fund VI (Retiree) | Strictly by formal request from Retirees in Fund IV who move their contributions to Retiree Fund VI and who choose to have their pension contributions invested in Non-Interest Money and Capital Market Products. | 10% of Portfolio Value | Moderately Conservative | Designed to provide income stability and capital preservation for retirees who opt for non-interest investment products, with emphasis on low risk and predictable returns. |
| Fund VII (Dollar Denominated Fund) | For the following class of contributors/arrangement: (i) Contributors who are Nigerians living abroad and individuals in Nigeria, whether Nigerian or foreign, who work for foreign companies or international organizations, receive all or part of their income in foreign currency, and are not subject to Section 2(2) of the PRA 2014. (ii) Corporate entities operating in Nigeria, with demonstrated foreign currency revenue earnings, may elect to set up Additional Benefit Schemes for their employees. | 30% of Portfolio Value | Moderately Conservative | Structured to provide foreign currency exposure and hedge against exchange rate risks. |
For the various Fund Type performance, Click here
Available Options and Conditions
For contributors choosing the funds in which they desire to be, the following shall apply:
- An active Contributor in Fund II who wishes to be assigned to Fund I shall make a formal request to his/her PFA.
- An active Contributor to Fund III who wishes to be assigned to Fund II shall make a formal request to his/her PFA.
- An RSA Retiree or active Contributor who is 50 years and above shall not be allowed to choose Fund I.
- An active contributor to Fund II is not allowed to opt for Fund III.
- Fund III is strictly for active contributors over 50 years.
