PenCom Charges Pension Operators to Deliver Returns That Beat Inflation

…Targets 3m new, funded accounts in 1 year

The director-general of the National Pension Commission (PenCom), Ms Omolola Oloworaran, has charged pension fund operators to deliver investment returns that consistently beat inflation, saying the performance of pension assets must translate into better financial security for Nigerian workers.

Oloworaran gave the charge in Abuja on Thursday at the National Pension Summit, themed “Pensions for All.”

She said pension fund administrators must go beyond managing large assets and ensure that the returns generated protect the value of workers’ retirement savings.

“Beating inflation is not an aspiration; it is your job,” she said.

The PenCom chief explained that real returns were necessary to preserve the purchasing power of contributors’ savings, warning that failure to outperform inflation could weaken the retirement security of millions of Nigerian workers.

She said pension operators must manage contributors’ funds with prudence, transparency and fiduciary responsibility, adding that every investment decision should prioritise the interest of workers.

“Pension money is not government money, it is not industry money. It is the deferred wages of Nigerian workers,” she said.

Oloworaran said pension assets could support national development through investments in infrastructure, housing, power and enterprise, but stressed that contributors’ interests must remain the priority.

At the summit, the PenCom director-general also announced a target of three million additional funded and active pension accounts within one year.

She said the target was part of efforts to expand pension coverage beyond the formal sector and bring more Nigerians into the Contributory Pension Scheme.

Oloworaran said the initiative would focus on traders, artisans, farmers, entrepreneurs and other workers in the informal sector.

She said the Contributory Pension Scheme must move beyond payroll workers to reach Nigerians in markets, motor parks, farms and other economic clusters.

“I have asked the industry to commit to three million additional funded active accounts in the next one year. And the good news, the owners of all our pension fund administrators have committed to that,” she said.

The PenCom boss stressed that the commission was targeting funded accounts, not merely new registrations.

“Not registrations, three million funded active accounts, new accounts. Because an empty account is a statistic, but a funded account is a future,” she said.

Oloworaran said Nigeria had recorded progress in the growth of pension assets, with total assets rising from N20.79 trillion in July 2024 to N31.8 trillion by the end of August 2026.

She, however, said the country’s pension assets remained small compared with the size of the economy, adding that more work was needed to deepen coverage and strengthen the retirement savings system.

“Measured against what Nigeria could become, we have barely begun,” she said.

Poor pensions worry PenCom

The PenCom director-general expressed concern over limited pension coverage, inadequate benefits and employers’ failure to remit pension contributions.

She said millions of Nigerians in the informal sector risked old age without adequate financial support despite years of productive work.

“A pension system that covers only the payroll is not a national pension system; it is a privileged pension system,” she said.

Oloworaran also raised concern over pension adequacy, saying many private-sector workers retired on benefits below the national minimum wage because contributions were calculated on only a fraction of their earnings.

She said almost 70 per cent of private-sector employees ended up with pensions below the national minimum wage, while more than 55 per cent of retirees whose pensions fell below the threshold came from the private sector.

“Our private-sector workers are retiring into poverty. This must change,” she said.

Oloworaran urged employers to calculate pension contributions based on workers’ actual earnings and remit the deductions promptly.

She warned employers against diverting deductions meant for workers’ retirement savings.

“When an employer deducts workers’ pension contribution and fails to remit it, that is not an administrative lapse. It is theft from the future of a Nigerian family,” she said.

The PenCom chief also reminded pension fund administrators and pension fund custodians of the June 30, 2027 deadline for the completion of their recapitalisation.

She said the commission would enforce the deadline and would not extend it.

“We are not changing our minds,” she said.

Oloworaran further called on federal and state governments to remit pension contributions promptly, fund accrued pension rights and ensure that more states joined the Contributory Pension Scheme.

She said the next phase of pension reform must focus on expanding coverage, improving benefits, enforcing compliance and building public trust in the pension system.