Nigeria’s Pension Fund Experiences Substantial Growth Amidst Efforts to Expand Coverage
Nigeria’s pension fund assets witnessed a significant surge, reaching N23.33 trillion by the end of the first quarter of 2025, representing a commendable 19% year-on-year growth. This positive trajectory was sustained throughout the first three months of the year, with the fund steadily increasing from N22.51 trillion at the close of 2024 to N22.86 trillion in January and further to N23.27 trillion by February’s end. The final boost in March added N61.91 billion, culminating in the impressive Q1 2025 figure. This growth underscores the increasing importance of the pension industry in Nigeria’s financial landscape and reflects the growing awareness and adoption of pension schemes among the populace.
Despite the impressive growth in fund value, the number of Retirement Savings Accounts (RSAs) remained below the 11 million mark, reaching 10,689,846 by March 2025. This represents a modest 3.98% year-on-year increase, indicating a substantial untapped potential within the Nigerian workforce. Recognizing this gap, the National Pension Commission (PenCom), the regulatory body overseeing the pension industry, has prioritized expanding coverage, particularly within the informal sector. This strategic focus aims to integrate a larger segment of the working population into the formal pension system, ensuring greater financial security for a broader demographic.
PenCom’s Director-General, Omolola Oloworaran, highlighted the significant disparity in informal sector participation during the inaugural Pension Industry Leadership Retreat. While the informal sector comprises over 77 million workers, less than 10,000 actively contribute to the Contributory Pension Scheme. To address this, PenCom is exploring incentives to encourage greater participation from this crucial segment. This initiative aligns with the broader goal of financial inclusion and recognizes the economic contributions of informal sector workers. By incentivizing participation, PenCom aims to create a more inclusive and robust pension system that caters to the diverse needs of the Nigerian workforce.
The call for greater informal sector inclusion was echoed by Lagos State Governor, Babajide Sanwo-Olu, who stressed the need to extend retirement security beyond formal employment. He emphasized the importance of developing innovative pension solutions that are accessible, trustworthy, and sustainable for all Nigerians, including market traders, artisans, and other vital contributors to the economy. This focus on inclusivity highlights the importance of tailoring pension solutions to the specific needs of diverse groups, ensuring widespread access to retirement security and promoting economic empowerment across different sectors.
In a significant move towards modernization and efficiency, PenCom launched a new online pension contribution remittance system. Starting June 1, 2025, all pension contributions are mandated to be remitted through approved payment solutions service providers. This digital transformation aims to streamline the remittance process, making it more efficient and transparent for employers. The new Pension Contribution Remittance System (PCRS) offers a hassle-free, fully digital platform, requiring employers simply to select their preferred payment solution provider and commence remittances.
PenCom has emphasized the benefits of the PCRS, highlighting its user-friendly nature and cost-effectiveness for employers. The system allows for the secure uploading of employee schedules and online payment of pension contributions, offering convenience and flexibility. Furthermore, the PCRS integrates verification mechanisms, ensuring the accuracy of uploaded schedules and verifying employee Personal Identification Numbers (PINs) and Pension Fund Administrators (PFAs) with PenCom before processing remittances. This enhanced security and accuracy contribute to the overall integrity and reliability of the pension system. The move to online remittance signifies a forward-thinking approach, embracing technological advancements to enhance the efficiency and accessibility of the Nigerian pension system.
