2025: Year of Retirement Security for Pensioners

The pension sector in 2025 witnessed major regulatory revolution  tagged  Revolution 2.0 and series of reforms targeted at expanding pension coverage and securing seamless retirement future for Nigerian workers, writes Ebere Nwoji

For the pension sector, the year 2025 was  a year of revolution  and  retirement security for Nigerian workers  who contributes to the Contributory Pension Scheme (CPS). This is as a result of series  of reforms put in place by the regulator, the National Pension Commission (PenCom).

A revolutionary year because during the year, PenCom’s management took the bold step of  working towards fulfilling the mandate of  rebuilding trust, expanding  coverage, strengthening  governance, and moving the CPS firmly into its next phase, as directed by the federal government.

Indeed, the commission during the year laid a solid foundation towards fulfilling this mandate  through various reforms it initiated with assurance to Nigerians that it would definitely accomplish the mandate in the  new year.

Trust Issue in Pension

Before 2025,  the problem of trust has been a major issue in the pension sector culminating in  many employees and employers not complying with contributing  into the scheme and workers in different sectors of the economy agitating for exit from the scheme.

The  pioneer Director General of PenCom, Muhammad Ahmad, had at a retreat for members of house committee on insurance and pension told stake holders in pension that one of the greatest challenges which operators have been grappling with in the CPS  was how to build public trust and confidence to cause members of the public willingly key into the scheme with hope that their money entrusted in the hands of pension fund managers are safe and secured.

He said the people saving their hard earned money with pension fund administrators needed to have some level of trust and confidence in  the people they are committing their fund to manage.

He said once the sector conquers lack of trust among pnd savers, the industry  would witness explosion in the number of workers and employers complying with the CPS.

He said this explains why the Micro Pension Scheme launched since 2019 has not met its target because the individual target saver is still in doubt of the entire system.

PenCom and FG Target

But speaking on the activities of PenCom during the year , the current  Director General of PenCom, Ms Omolola Oloworaran, said: “I was confirmed as Director General of the National Pension Commission with a clear mandate: to rebuild trust, expand coverage, strengthen governance, and move the CPS firmly into its next phase. I am proud to say that this past year has been defined by bold decisions, structural reforms, and measurable impact”.

She highlighted some of the reforms embarked upon by the commission during the year as:formal launch of  Pension Revolution 2.0,  which she described as the most comprehensive reform agenda in the Nigerian pension industry since 2004.

According to her, this was not cosmetic reform. It was structural. It brought together new regulations, stronger supervision, governance reforms, digital transformation, and industry realignment, all designed to future-proof the pension system and position it as a pillar of national stability  and long-term development.

Of these reforms and revolutionary actions instituted by the commission during the year, one of the most historic milestones of the year was the presidential  approval and disbursement of N758 billion to settle outstanding  pension liabilities. Oloworaran said this was an unprecedented intervention  that has sent a clear and powerful signal that Nigeria honours its promises to its workers and retirees.

Over the years, the media and other stake holders in pension sector have  been probing to know the quantum of Accrued Rights owed to contributing workers by the Federal Government.

This is because huge outstanding Accrued Rights owed to workers was standing as impediment to  retiring workers  collecting their retirement benefits as and when do. This is because the law establishing  the CPS said the Accrued Right must be paid into the workers’ Retirement Savings Accounts (RSA) before payment of his benefits by his Pension Fund Administrator(PFA) would be made.

But government over the years remained passive towards  clearing  of  the Accrued Rights  of its workers thereby causing delay in payment of workers’ benefit under CPS and  truncating the progress of CPS . To the extent that workers will retire and wait for as long as two years before receiving their  retirement benefits whereas their  contributed funds are much available with their  PFAs.

But in 2025, the federal government released a whooping N758 billion to clear all outstanding pension liabilities including the Accrued Rights. Government also cleared long-standing pension increase backlogs for federal  government treasury-funded retirees, some dating as far back as  2007.

Gladdened by this, the PenCom DG stated, “What many believed would never be paid has now been paid. In addition, zero waiting time for the payment of accrued pension rights was restored with effect from July 2025. Today, retirees receive their benefits when due, not months or years later.”

Other achievements

Other achievements recorded by the industry during the year under review  according to Oloworaran  included: introduction of Pension Boost 1.0, which  added N2.68 billion to monthly pension payments for CPS retirees. Full automation of critical pension processes, including the Pension Clearance Certificate system, benefit processing, and contribution remittance platforms.

Improvement on operational efficiency through reduction of leakages and transparency.

inauguration of the Board of Trustees of the PenCare Initiative, a landmark industry-wide intervention to provide free and accessible healthcare for low income retirees.

Establishment of the Pension Industry Leadership Council, a strategic platform that brings together industry leaders to drive innovation, reinforce accountability, and build collective ownership of reforms.

Also a new pension manager came into the system  with the name Parthian Pensions, which said its target is the retail market not necessarily the corporate institutions.

Another  major reform witnessed  by the industry during the year was restructuring and rebranding of the Micro Pension Plan into the Personal Pension Plan.

Oloworaran said  it was  about meeting Nigerians where they are  including artisans, traders, gig workers, creatives, and informal sector workers.

The industry during the year also  witnessed capital increase  in tiered form.

According to PenCom , PFAs with assets under management below N500000 billion are to raise their minimum capital from N5 billion to N20 billion while those with assets under management above N5 billion are to raise their capital from N5 billion to N20 billion plus 1 percent of the excess assets under management. All PFAs have up to December 31 , 2026 to meet the new capital  requirement. Also new entrants into the business need N20 billion to commence. This, according to PenCom DG, is to build stronger  institutions, better risk management, deeper expertise, and a greater capacity to attract and retain skilled professionals.

Linking of Pension Clearance Certificates to participation across the pension industry value chain was another development witnessed by the sector during the year as well as activation of activities of recovery agents against the negative behaviour of deviant employers was achieved during the year and this led to the recovery of   N4.04 billion, from non complying employers.

between the months of January to November 2025 compared to N1.44 billion  recovered in the whole of 2024. This represents an increase of over 180 percent. Most notably, N2.06 billion was recovered in the third quarter of 2025 alone, almost 150 percent of total recoveries recorded in the entire year 2024.

The pension sector also recorded  continuous increase in number of contributors  into the scheme.

According to PenCom, total RSA registration as at August 2025 was approximately 10.9 million up from 10.8 million as of June 2025. Likewise pension assets as of November 2025 grew to N27.052 trillion .

On the part of  PFAs, the operators during the year  under the aegis of Pension Fund Operators Association of Nigeria (PenOp), launched a  report titled, “Pension Funds and Infrastructures in Nigeria,” to educate the public on investment of pension funds  on infrastructural development.

PenOp in the report noted that though Nigeria has a huge infrastructure deficit, to the extent that World Bank estimates indicated that Nigeria required annual investments of about $100 billion  in infrastructure every year for the next 10 years,  the use of pension funds as alternative means of  infrastructural financing has not been given consideration.

PenOp said as a result, pension funds investments into infrastructure has continued to be largely untapped market and below one per cent of the sector’s Assets Under Management despite steady growth in pension assets.

“The use of pension funds for financing infrastructure remains untapped as a source of financing even when the investment guideline permits them to invest up to 10 percent of the fund into infrastructure,” the report stated.

The PFAs during the year embarked on digital transformation and customer experience .The administrators recorded significant growth in assets under management . For instance, in 2025, operators surpassed their target of growing their assets under management from N18.36 trillion in December 2024 to N20 trillion as they were able to grow their assets to N27.052 trillion as at November 2025.

Being gingered by PenCom through its licensed agents PFAs during the year 2025 began a kind of aggressive enrollment drives for informal sector workers into personal pension plan eg traders, artisans, farmers, gig economy workers . They leveraged USSD codes, mobile apps, and agent networks to simplify registration and contribution.

Implementating Pension Enhancement Program

For existing retirees on Programmed Withdrawal, PFAs  implemented actuarial calculations to increase their monthly payouts due to the superior long-term returns generated on their savings. This tangible increase in retirees’ income is a direct achievement of prudent fund management.

Access to Housing via RSA

The year under review witnessed  a significant rise in the number of RSA holders applying for and receiving mortgage financing to become homeowners. PFAs worked  closely with the Federal Mortgage Bank of Nigeria (FMBN) and primary mortgage institutions to streamline the process, making homeownership a tangible benefit for active contributors.

Challenges Amidst Achievements

Amidst these achievements there are challenges such as  Inflationary Pressure: The real return on pension investments (nominal return minus inflation) remains a key focus. The  continuous volatility in Naira affected the valuation of foreign asset holdings.

Annuity suffered low  Penetration as most  retirees still opt for programmed withdrawals over annuities.

Other challenges as enumerated by PenCom are  coverage expansion has remained  limited, with many states and employers yet to fully comply.  A peep into the response of various states shows that many states are still far from keying into the  CPS scheme. While some state governments are yet to enact their pension law in line with Pension Reform Act, some have enacted but have not fully started operation.

Another major challenge faced by  the pension sector during the year was  how to get the sector operators especially managers of PFA roll their sleeves to work and play the role of chief marketers of the sector.

Over the years and up till now,  managers of the various PFAs are still relying on PenCom to spoon-  feed them when it comes to generating business and marketing their products.

This explains why they could not push the Micro pension scheme from 2019 it was launched up to 2025 when it was renamed personal pension plan.

They are all relying on the compulsory CPS which the law compels workers and their employers to key into .

As PenCom restructures and reintroduces  the Micro Pension plan in the new year, the onerous is on the PFAs to rise up and put on their thinking caps and evolve ways of capturing the individuals who are targets of the personal pension plan.