The National Pension Commission (PenCom) has stated that it will not extend the June 30, 2027 deadline for pension fund administrators and pension fund custodians to complete their recapitalisation. According to PenCom's Director-General, Omolola Oloworaran, the exercise is critical for strengthening the industry and protecting workers' retirement savings. The recapitalisation aims to build stronger financial institutions capable of managing contributors' funds responsibly and delivering sustainable returns.
Oloworaran outlined the commission's next phase of reforms, which include increased scrutiny over investment discipline, performance, and accountability. The industry is moving towards a more robust regulatory framework. The recapitalisation exercise is intended to move the industry beyond growth in pension assets to building institutions with the financial strength and operational capacity required to safeguard the retirement savings of millions of Nigerians.
The reforms extend beyond increasing the financial capacity of pension operators to ensuring that retirement savings are invested prudently and generate returns capable of protecting contributors against inflation and other economic pressures. Pension fund administrators must adopt investment strategies that reflect the retirement needs of contributors. The ultimate objective of pension management is to improve the financial security and welfare of retirees.
Oloworaran identified pension coverage, adequacy of retirement benefits, and compliance with statutory requirements as major areas requiring attention. The effectiveness of the contributory pension scheme should not be assessed solely by the value of assets under management. The commission is working to expand participation beyond the formal employment sector to cover traders, artisans, farmers, commercial transport operators, and other Nigerians earning their livelihoods outside conventional payroll systems.
As part of the expansion drive, PenCom has obtained a commitment from pension fund administrators to establish three million additional funded and active pension accounts within one year. The target is focused on accounts receiving actual contributions rather than merely increasing the number of Nigerians registered under the scheme. To achieve the target, the commission plans to leverage the Personal Pension Plan, accredited pension agents, and digital onboarding platforms.
President Bola Tinubu is expected to launch a pension security initiative on November 10, 2026, which includes PenCare, a pension-related healthcare programme, and a minimum pension guarantee. The proposed initiative aims to provide additional protection for vulnerable retirees. Oloworaran expressed concern about the vulnerability of retirees to poverty and rising living costs, particularly where their pension payments are insufficient to cover essential expenses.
The commission is also seeking to address the adequacy of pension benefits, particularly among private-sector employees whose retirement income may be lower than the national minimum wage. Nearly 70 per cent of private-sector employees retire with pension payments below the national minimum wage. Oloworaran urged private-sector employers to adopt a more realistic basis for calculating pension contributions to help improve the adequacy of retirement benefits.
Key points
- The National Pension Commission will not extend the June 30, 2027 deadline for pension fund administrators and custodians to complete their recapitalisation.
- PenCom aims to establish three million additional funded and active pension accounts within one year.
- The commission is working to expand participation beyond the formal employment sector to cover traders, artisans, farmers, commercial transport operators, and other Nigerians earning their livelihoods outside conventional payroll systems.
