The pension sector in 2025 witnessed main regulatory revolution tagged Revolution 2.0 and sequence of reforms focused at increasing pension protection and securing seamless retirement future for Nigerian employees, writes Ebere Nwoji
For the pension sector, the yr 2025 was a yr of revolution and retirement safety for Nigerian employees who contributes to the Contributory Pension Scheme (CPS). That is because of sequence of reforms put in place by the regulator, the Nationwide Pension Fee (PenCom).
A revolutionary yr as a result of in the course of the yr, PenCom’s administration took the daring step of working in the direction of fulfilling the mandate of rebuilding belief, increasing protection, strengthening governance, and shifting the CPS firmly into its subsequent section, as directed by the federal authorities.
Certainly, the fee in the course of the yr laid a stable basis in the direction of fulfilling this mandate by varied reforms it initiated with assurance to Nigerians that it could undoubtedly accomplish the mandate within the new yr.
Belief Problem in Pension
Earlier than 2025, the issue of belief has been a serious concern within the pension sector culminating in many staff and employers not complying with contributing into the scheme and employees in several sectors of the financial system agitating for exit from the scheme.
The pioneer Director Normal of PenCom, Muhammad Ahmad, had at a retreat for members of home committee on insurance coverage and pension advised stake holders in pension that one of many biggest challenges which operators have been grappling with within the CPS was how one can construct public belief and confidence to trigger members of the general public willingly key into the scheme with hope that their cash entrusted within the fingers of pension fund managers are protected and secured.
He mentioned the individuals saving their hard-earned cash with pension fund directors wanted to have some stage of belief and confidence in the individuals they’re committing their fund to handle.
He mentioned as soon as the sector conquers lack of belief amongst pnd savers, the {industry} would witness explosion within the variety of employees and employers complying with the CPS.
He mentioned this explains why the Micro Pension Scheme launched since 2019 has not met its goal as a result of the person goal saver continues to be unsure of your entire system.
PenCom and FG Goal
However talking on the actions of PenCom in the course of the yr , the present Director Normal of PenCom, Ms Omolola Oloworaran, mentioned: “I used to be confirmed as Director Normal of the Nationwide Pension Fee with a transparent mandate: to rebuild belief, develop protection, strengthen governance, and transfer the CPS firmly into its subsequent section. I’m proud to say that this previous yr has been outlined by daring choices, structural reforms, and measurable impression”.
She highlighted a number of the reforms embarked upon by the fee in the course of the yr as:formal launch of Pension Revolution 2.0, which she described as essentially the most complete reform agenda within the Nigerian pension {industry} since 2004.
In keeping with her, this was not beauty reform. It was structural. It introduced collectively new rules, stronger supervision, governance reforms, digital transformation, and {industry} realignment, all designed to future-proof the pension system and place it as a pillar of nationwide stability and long-term growth.
Of those reforms and revolutionary actions instituted by the fee in the course of the yr, probably the most historic milestones of the yr was the presidential approval and disbursement of N758 billion to settle excellent pension liabilities. Oloworaran mentioned this was an unprecedented intervention that has despatched a transparent and highly effective sign that Nigeria honours its guarantees to its employees and retirees.
Over time, the media and different stake holders in pension sector have been probing to know the quantum of Accrued Rights owed to contributing employees by the Federal Authorities.
It’s because big excellent Accrued Rights owed to employees was standing as obstacle to retiring employees amassing their retirement advantages as and when do. It’s because the legislation establishing the CPS mentioned the Accrued Proper have to be paid into the employees’ Retirement Financial savings Accounts (RSA) earlier than fee of his advantages by his Pension Fund Administrator(PFA) could be made.
However authorities through the years remained passive in the direction of clearing of the Accrued Rights of its employees thereby inflicting delay in fee of employees’ profit below CPS and truncating the progress of CPS . To the extent that employees will retire and wait for so long as two years earlier than receiving their retirement advantages whereas their contributed funds are a lot accessible with their PFAs.
However in 2025, the federal authorities launched a whooping N758 billion to clear all excellent pension liabilities together with the Accrued Rights. Authorities additionally cleared long-standing pension improve backlogs for federal authorities treasury-funded retirees, some relationship way back to 2007.
Gladdened by this, the PenCom DG acknowledged, “What many believed would by no means be paid has now been paid. As well as, zero ready time for the fee of accrued pension rights was restored with impact from July 2025. At present, retirees obtain their advantages when due, not months or years later.”
Different achievements
Different achievements recorded by the {industry} in the course of the yr below evaluation based on Oloworaran included: introduction of Pension Increase 1.0, which added N2.68 billion to month-to-month pension funds for CPS retirees. Full automation of essential pension processes, together with the Pension Clearance Certificates system, profit processing, and contribution remittance platforms.
Enchancment on operational effectivity by discount of leakages and transparency.
inauguration of the Board of Trustees of the PenCare Initiative, a landmark industry-wide intervention to supply free and accessible healthcare for low revenue retirees.
Institution of the Pension Trade Management Council, a strategic platform that brings collectively {industry} leaders to drive innovation, reinforce accountability, and construct collective possession of reforms.
Additionally a brand new pension supervisor got here into the system with the title Parthian Pensions, which mentioned its goal is the retail market not essentially the company establishments.
One other main reform witnessed by the {industry} in the course of the yr was restructuring and rebranding of the Micro Pension Plan into the Private Pension Plan.
Oloworaran mentioned it was about assembly Nigerians the place they’re together with artisans, merchants, gig employees, creatives, and casual sector employees.
The {industry} in the course of the yr additionally witnessed capital improve in tiered type.
In keeping with PenCom , PFAs with property below administration under N500000 billion are to boost their minimal capital from N5 billion to N20 billion whereas these with property below administration above N5 billion are to boost their capital from N5 billion to N20 billion plus 1 p.c of the surplus property below administration. All PFAs have as much as December 31 , 2026 to fulfill the brand new capital requirement. Additionally new entrants into the enterprise want N20 billion to begin. This, based on PenCom DG, is to construct stronger establishments, higher danger administration, deeper experience, and a larger capability to draw and retain expert professionals.
Linking of Pension Clearance Certificates to participation throughout the pension {industry} worth chain was one other growth witnessed by the sector in the course of the yr in addition to activation of actions of restoration brokers towards the detrimental behaviour of deviant employers was achieved in the course of the yr and this led to the restoration of N4.04 billion, from non complying employers.
between the months of January to November 2025 in comparison with N1.44 billion recovered in the entire of 2024. This represents a rise of over 180 p.c. Most notably, N2.06 billion was recovered within the third quarter of 2025 alone, virtually 150 p.c of whole recoveries recorded in your entire yr 2024.
The pension sector additionally recorded steady improve in variety of contributors into the scheme.
In keeping with PenCom, whole RSA registration as at August 2025 was roughly 10.9 million up from 10.8 million as of June 2025. Likewise pension property as of November 2025 grew to N27.052 trillion .
On the a part of PFAs, the operators in the course of the yr below the aegis of Pension Fund Operators Affiliation of Nigeria (PenOp), launched a report titled, “Pension Funds and Infrastructures in Nigeria,” to teach the general public on funding of pension funds on infrastructural growth.
PenOp within the report famous that although Nigeria has an enormous infrastructure deficit, to the extent that World Financial institution estimates indicated that Nigeria required annual investments of about $100 billion in infrastructure yearly for the following 10 years, the usage of pension funds as various technique of infrastructural financing has not been given consideration.
PenOp mentioned because of this, pension funds investments into infrastructure has continued to be largely untapped market and under one per cent of the sector’s Belongings Beneath Administration regardless of regular development in pension property.
“Using pension funds for financing infrastructure stays untapped as a supply of financing even when the funding guideline lets them make investments as much as 10 p.c of the fund into infrastructure,” the report acknowledged.
The PFAs in the course of the yr launched into digital transformation and buyer expertise .The directors recorded vital development in property below administration . For example, in 2025, operators surpassed their goal of rising their property below administration from N18.36 trillion in December 2024 to N20 trillion as they have been capable of develop their property to N27.052 trillion as at November 2025.
Being gingered by PenCom by its licensed brokers PFAs in the course of the yr 2025 started a sort of aggressive enrollment drives for casual sector employees into private pension plan eg merchants, artisans, farmers, gig financial system employees . They leveraged USSD codes, cellular apps, and agent networks to simplify registration and contribution.
Implementating Pension Enhancement Program
For present retirees on Programmed Withdrawal, PFAs applied actuarial calculations to extend their month-to-month payouts as a result of superior long-term returns generated on their financial savings. This tangible improve in retirees’ revenue is a direct achievement of prudent fund administration.
Entry to Housing through RSA
The yr below evaluation witnessed a big rise within the variety of RSA holders making use of for and receiving mortgage financing to change into householders. PFAs labored intently with the Federal Mortgage Financial institution of Nigeria (FMBN) and first mortgage establishments to streamline the method, making homeownership a tangible profit for energetic contributors.
Challenges Amidst Achievements
Amidst these achievements there are challenges corresponding to Inflationary Stress: The true return on pension investments (nominal return minus inflation) stays a key focus. The steady volatility in Naira affected the valuation of overseas asset holdings.
Annuity suffered low Penetration as most retirees nonetheless go for programmed withdrawals over annuities.
Different challenges as enumerated by PenCom are protection enlargement has remained restricted, with many states and employers but to completely comply. A peep into the response of assorted states exhibits that many states are nonetheless removed from keying into the CPS scheme. Whereas some state governments are but to enact their pension legislation consistent with Pension Reform Act, some have enacted however haven’t absolutely began operation.
One other main problem confronted by the pension sector in the course of the yr was how one can get the sector operators particularly managers of PFA roll their sleeves to work and play the position of chief entrepreneurs of the sector.
Over time and up until now, managers of the varied PFAs are nonetheless counting on PenCom to spoon- feed them in the case of producing enterprise and advertising their merchandise.
This explains why they may not push the Micro pension scheme from 2019 it was launched as much as 2025 when it was renamed private pension plan.
They’re all counting on the obligatory CPS which the legislation compels employees and their employers to key into .
As PenCom restructures and reintroduces the Micro Pension plan within the new yr, the onerous is on the PFAs to stand up and placed on their pondering caps and evolve methods of capturing the people who’re targets of the non-public pension plan.
