About 70 per cent of private-sector employees in Nigeria retire with pension benefits below the national minimum wage, highlighting the gap between the growth of pension assets and the adequacy of retirement income, according to the National Pension Commission (PenCom).
The Director-General of PenCom, Omolola Oloworaran, disclosed this on Thursday at the 2026 National Pension Week Conference and Awards in Abuja, where she raised concerns over inadequate retirement benefits, limited pension coverage and employers’ failure to remit pension contributions.
She also disclosed that more than 55 per cent of retirees receiving pensions below the national minimum wage come from the private sector, attributing the situation partly to employers who calculate pension contributions using narrow definitions of pensionable earnings.
According to Oloworaran, Nigeria’s pension industry recorded significant asset growth, with total pension assets increasing from N20.79tn in July 2024 to N31.8tn at the end of August 2026, representing an increase of approximately N11tn.
Despite the expansion of the industry’s asset base, she said pension coverage remained inadequate, particularly among workers in the informal economy, including market traders, artisans, farmers, transport workers and young technology professionals.
PenCom is targeting three million additional funded pension accounts within the next year as part of efforts to expand participation in the Contributory Pension Scheme (CPS).
Oloworaran said pension fund administrators had committed to achieving the target, stressing that the objective was to increase the number of accounts receiving actual contributions rather than merely expand registrations.
“For every Nigerian inside the scheme, roughly nine more are standing outside it,” she said.
To address the coverage gap, the commission plans to expand access through personal pension funds, accredited pension agents and digital platforms, with particular emphasis on workers outside formal employment.
Under the Contributory Pension Scheme, the Pension Reform Act provides for a minimum combined pension contribution of 18 per cent of employees’ monthly emoluments, comprising 10 per cent from employers and eight per cent from employees.
However, Oloworaran warned that some employers reduce workers’ retirement savings by applying restrictive definitions of pensionable earnings when calculating contributions.
She also cautioned employers against deducting pension contributions from employees’ salaries without transferring the funds into their Retirement Savings Accounts (RSAs).
The PenCom chief said the commission would use the enforcement powers provided under the Pension Reform Act to recover outstanding contributions and hold defaulting employers accountable.
She further called on federal and state governments to fulfil their pension obligations through timely remittance of contributions, funding of accrued pension rights and adoption of the Contributory Pension Scheme by all states.
Oloworaran also announced that pension fund administrators and custodians must complete their recapitalisation exercises by June 30, 2027, as the commission seeks to strengthen the industry’s institutional capacity and improve the protection of pension assets.
She urged pension operators to pursue investment returns above inflation, noting that the real value of pension investments directly affects retirees’ purchasing power.
According to her, pension assets could also support infrastructure, housing, power and enterprise development, provided investments are guided by prudence, transparency and appropriate safeguards.
“Pension money is not government money; it is the deferred wages of Nigerian workers,” she said.
Meanwhile, President Bola Tinubu is expected to unveil the Pension Security Initiative on November 10.
The initiative will feature the PenCare healthcare programme and a minimum pension guarantee designed to strengthen retirement protection, particularly for low-income pensioners.
