PenCom Targets 3m Funded Accounts to Close Nigeria’s Pension-Coverage Gap
Nigeria’s pension regulator has secured an industry commitment to add three million funded and active pension accounts within one year, setting an ambitious test for the country’s attempt to extend retirement protection beyond salaried workers.
The Director-General of the National Pension Commission, Omolola Oloworaran, announced the target at the National Pension Conference and Awards in Abuja, where she outlined a new reform phase centred on coverage, benefit adequacy, compliance and institutional strength.
The distinction between a registered account and a funded account is fundamental. Nigeria’s financial sector has repeatedly celebrated customer registrations that do not translate into sustained economic participation. PenCom’s target requires newly opened accounts to receive actual contributions, turning enrolment into accumulating retirement savings.
Pension fund administrators have committed to delivering the additional accounts over the next year. The initiative will target market traders, artisans, farmers, transport operators, entrepreneurs and young technology professionals—millions of whom work outside conventional employer payrolls.
PenCom plans to reach them through the Personal Pension Plan, accredited pension agents and digital onboarding platforms.
From asset growth to human protection
Nigeria’s pension industry has recorded strong headline growth. According to Oloworaran, assets under management increased from ₦20.79 trillion in July 2024 to ₦31.8 trillion by the end of August 2026—an expansion of more than ₦11 trillion in just over two years.
The increase strengthens the industry’s position as one of Nigeria’s largest pools of long-term domestic capital. Pension funds can support government securities, corporate financing, infrastructure, housing and other investible assets consistent with regulatory safeguards.
Yet asset growth does not automatically mean that the pension system is protecting enough Nigerians.
Oloworaran estimated that for every Nigerian participating in the scheme, roughly nine remain outside it. This exposes the central contradiction of Nigeria’s pension market: a rapidly expanding asset pool serving only a fraction of the country’s working population.
A pension system concentrated around formal employment cannot adequately protect an economy in which informal and self-employed workers account for a substantial share of livelihoods.
The next phase of reform must therefore move from following payrolls to following workers—into markets, farms, transport clusters, digital platforms and small businesses to ensure that pension accounts grow according to plan.
The harder question: will contributors stay active?
Opening three million funded accounts will require more than aggressive marketing. Informal-sector workers often have irregular earnings, limited disposable income and competing short-term financial obligations.
For a trader facing rising rent, transportation and inventory costs, retirement may appear less urgent than keeping the business open. Farmers exposed to weather and price shocks may struggle to maintain predictable monthly contributions. Gig workers may have income but no employer contribution to strengthen their savings.
Pension operators must consequently design flexible contribution arrangements that reflect uneven cash flows. Daily, weekly and seasonal payment options could be more suitable than rigid monthly schedules.
Trust will be equally important. Contributors need clear information on charges, investment performance, withdrawal conditions, beneficiary rights and access to savings at retirement. Three million funded accounts will have limited value if many become dormant after their first contribution.
The appropriate performance indicators should therefore include contribution persistence, average balances, customer retention and geographical and occupational distribution—not account openings alone.
Pension adequacy remains the deeper crisis
Coverage is only one part of the challenge. Workers already inside the Contributory Pension Scheme may still retire with benefits too small to support a dignified life.
Under the Pension Reform Act, the minimum combined contribution is 18 per cent of monthly earnings, comprising 10 per cent from the employer and eight per cent from the employee.
Oloworaran expressed concern that some private-sector employers calculate contributions using narrow definitions of pensionable earnings. This reduces the amounts credited to workers’ Retirement Savings Accounts and ultimately weakens their retirement benefits.
She said almost 70 per cent of private-sector employees retire with pensions below the national minimum wage, while private-sector retirees account for more than half of those receiving pensions below that threshold.
The figures expose an uncomfortable truth: a worker can contribute for years and still retire into financial insecurity if wages are low, contribution calculations are restricted, remittances are inconsistent or investment returns fail to preserve purchasing power.
Inflation makes this challenge more severe. Pension balances may rise in nominal terms while losing real purchasing power. PenCom’s demand that operators deliver returns above inflation is therefore not merely an investment aspiration; it is essential to maintaining the economic value of workers’ deferred wages.
PenCare and the minimum pension promise
President Bola Tinubu is expected to unveil the Pension Security Initiative on November 10, 2026. The programme is expected to include PenCare, a healthcare-support initiative for eligible retirees, and a minimum pension guarantee intended to provide a safety net for vulnerable pensioners.
Healthcare is one of the largest and least predictable expenses in old age. Linking retirement income with access to essential medical services could reduce the risk that retirees exhaust limited pensions on treatment.
The first phase of PenCare, however, is expected to cover only 30,000 eligible retirees. This makes it a useful beginning rather than a complete solution. Clear eligibility rules, transparent selection and a credible expansion plan will be necessary to prevent the programme from becoming a small intervention inside a much larger welfare deficit.
The proposed minimum pension guarantee will also require sustainable funding. PenCom has urged employers and other stakeholders to support the Pension Protection Fund, but the industry must clarify how the guarantee will be financed, calculated and protected from political interference to ensure safety of the pension accounts and the entire pensions industry.
Compliance cannot remain negotiable
Oloworaran warned employers against deducting pension contributions from workers’ salaries without remitting them. Such conduct is more than an administrative failure: it deprives workers of their savings, investment returns and future financial security.
PenCom has pledged to use its statutory powers to recover outstanding contributions. Federal and state governments have also been urged to remit deductions promptly, fund accrued pension rights and bring more states fully into the Contributory Pension Scheme.
Enforcement must become visible. Publishing anonymised data on arrears recovered, defaulting sectors, penalties imposed and resolution times would help rebuild contributor confidence.
The Commission has also fixed June 30, 2027, as the deadline for pension fund administrators and custodians to complete recapitalisation. Stronger operators should possess better technology, risk-management systems, cybersecurity capacity and investment expertise. But consolidation must not weaken competition or leave contributors with fewer meaningful choices.
Market, brand and investor implications
Three million genuinely active accounts would expand the pension industry’s revenue base and deepen Nigeria’s domestic savings pool. It could create opportunities for pension technology, agent networks, financial education, identity verification and low-cost payment systems.
For PFAs, the expansion drive is a major brand test. Operators must compete on trust, accessibility, service quality and understandable investment performance—not merely corporate size.
For investors and policymakers, a deeper pension market offers more patient domestic capital. But pension assets should not be treated as a convenient financing pool for poorly prepared public projects. Every investment must meet rigorous standards of risk, return, governance and liquidity.
Pension capital belongs to contributors. National-development value must never override fiduciary responsibility.
BRANDECONOMY Insight
PenCom’s three-million-account target is bold, measurable and directionally correct. But the real measure of success will not be the number of forms completed or PINs issued. It will be whether new contributors continue saving, whether employers remit faithfully and whether accumulated balances retain their purchasing power.
Nigeria must also resist the temptation to celebrate ₦31.8 trillion in assets while millions of retirees receive inadequate benefits and most workers remain uncovered.
The pension industry’s next frontier is not size. It is trust, inclusion and adequacy.
A pension account becomes meaningful only when it is funded consistently, managed responsibly and capable of protecting a worker from poverty in old age. That is the standard against which PenCom’s reform agenda—and every pension operator’s brand promise—must now be judged.
