…Sets November For Minimum Pension Guarantee Take-Off
…Targets Three Million Funded Pension Accounts By 2027
The National Pension Commission (PenCom) has insisted that the June 30, 2027 deadline for pension fund administrators and custodians to complete their recapitalisation remains sacrosanct, warning that it will not reconsider the timeline.
The Director-General of PenCom, Omolola Oloworaran, stated this while outlining the next phase of reforms in Nigeria’s contributory pension industry, stressing that operators must strengthen their financial capacity to protect workers’ retirement savings.
She said every pension fund administrator and custodian must complete the recapitalisation exercise by the deadline, adding that the commission would hold operators to higher standards of investment discipline, performance and accountability.
“We are not changing our minds,” Oloworaran said, insisting that the industry must move beyond the growth in pension assets to building institutions strong enough to safeguard the savings of millions of Nigerian workers.
“Size is what we have achieved. Strength is what we now demand,” she added.
The PenCom boss said the recapitalisation exercise was part of broader reforms aimed at ensuring that pension funds are managed prudently and generate returns capable of protecting contributors against the effects of inflation.
She also urged pension fund administrators to align their investment strategies with the period when contributors would need their savings, noting that the ultimate objective should be to deliver meaningful returns that improve retirees’ welfare.
Oloworaran said the commission was determined to close existing gaps in pension coverage, adequacy and compliance, arguing that the success of the contributory pension scheme should be measured by the number of Nigerians it protects rather than the size of assets under management alone.
The commission, she said, was also seeking to expand the scheme beyond workers in formal employment to include traders, artisans, farmers, commercial transport operators and other Nigerians working in the informal sector.
As part of this effort, PenCom has secured a commitment from pension fund administrators to open three million additional funded and active pension accounts within one year.
She emphasised that the target was not merely to register new contributors but to ensure that the accounts receive contributions.
“Not registrations, three million funded active accounts, new accounts, because an empty account is a statistic, but a funded account is a future,” she said.
Oloworaran said the expansion drive would be supported by the Personal Pension Plan, accredited pension agents and digital onboarding platforms designed to make pension participation more accessible to Nigerians outside the formal payroll system.
She noted that the contributory pension scheme still had a significant coverage gap, with roughly nine Nigerians outside the scheme for every one covered.
According to her, expanding coverage is critical to preventing millions of Nigerians from reaching old age without adequate financial support.
The PenCom chief also announced that President Bola Tinubu was expected to launch a pension security initiative on November 10, 2026, subject to the planned programme proceeding as scheduled.
The initiative is expected to include PenCare, a pension-related healthcare programme, and the minimum pension guarantee designed to provide a measure of financial protection for vulnerable retirees.
Oloworaran said the minimum pension guarantee, provided for under Sections 82 and 84 of the Pension Reform Act 2014, should no longer remain an unfulfilled promise.
She expressed optimism that the initiative would help protect retirees who have spent their working lives serving the country but remain vulnerable to poverty, rising living costs and inadequate pension payments.
According to her, the objective is to ensure that retirees do not have to choose between purchasing medicines and meeting their basic food needs.
The PenCom DG said the commission was also working to address the adequacy of pension benefits, particularly among private-sector workers whose retirement payments could fall below the national minimum wage.
She disclosed that almost 70 per cent of private-sector employees end up with pensions below the national minimum wage, while more than 55 per cent of all retirees receiving pensions below the minimum wage come from the private sector.
Oloworaran attributed part of the problem to the practice of calculating pension contributions on a narrow definition of pensionable earnings rather than a worker’s full earnings.
Under the pension framework she outlined, the combined statutory contribution rate is 18 per cent of pensionable pay, comprising 10 per cent from employers and eight per cent from employees.
She urged private-sector employers to calculate contributions on a more realistic earnings base and support the pension protection fund, arguing that businesses should share responsibility for protecting workers who help generate their profits.
She also warned employers against deducting pension contributions from workers’ salaries without remitting the funds to the appropriate accounts.
According to her, the commission would use the powers provided by law to recover outstanding contributions and hold defaulting employers accountable.
Oloworaran said pension assets had grown from N20.79tn in July 2024 to N31.8tn by the end of August 2026, representing an increase of about N11tn in just over two years.
She, however, said the growth in assets must translate into improved retirement security, noting that the country’s pension assets remained relatively small compared with the size of its economy and the potential number of contributors.
The commission also plans to strengthen the pension protection fund and improve compliance by employers and state governments, while encouraging more states to join the contributory pension scheme.
Oloworaran said pension funds could also support national development by financing infrastructure, housing, power and enterprises, provided investments are made prudently and in the best interests of contributors.
She stressed that pension assets belonged to workers and must not be treated as government funds, adding that every investment decision must prioritise the safety and returns of contributors’ savings.
She called on governments, employers, labour unions and pension industry operators to work with the commission to build a more inclusive and sustainable pension system.
According to her, Nigeria’s next phase of pension reform must ensure that workers across the formal and informal sectors can save for retirement and receive benefits that preserve their dignity in old age.
