Pension Assets Rise 51% as Contributors Reach 11.32 Million

Nigeria’s pension assets have climbed to ₦31.48 trillion after expanding by approximately 51 per cent over two years, strengthening the industry’s position as one of the country’s largest sources of long-term capital.

The assets increased by about ₦10.6 trillion from the ₦20.79 trillion recorded in July 2024, according to figures disclosed by the National Pension Commission.

Registered contributors also rose from 10.42 million to 11.32 million during the period with 938,229 workers joining the Contributory Pension Scheme.

The difference between the growth rates of assets and contributors is significant as participation increased by about 9 per cent while the value of funds under management expanded much faster, indicating the combined influence of new contributions, investment returns and the rising nominal value of financial assets.

Higher yields on government securities have provided Pension Fund Administrators with opportunities to earn stronger returns from Treasury bills and bonds.

However, the increase in asset value must also be considered alongside inflation, which reduces the purchasing power of retirement savings.

This means the industry’s 51 per cent nominal expansion does not automatically represent an equivalent improvement in the future living standards of contributors. Long-term performance will depend on whether pension returns consistently exceed inflation after management costs.

The growth also gives pension funds greater influence in Nigeria’s financial markets. With more than ₦31 trillion under management, PFAs can provide capital for government borrowing, corporate debt, equities, infrastructure and other investments requiring long repayment periods.

PenCom intends to extend participation beyond salaried employees through a Personal Pension Plan focused on workers in the informal economy.

The targeted groups include traders, artisans, transport operators, cooperative members and people earning income through digitally enabled businesses.

Expanding coverage in this segment remains essential because millions of economically active Nigerians do not have structured retirement savings.

Irregular earnings, limited financial awareness and concerns about access to funds have traditionally discouraged informal workers from joining pension programmes.

The industry also recorded changes in benefit administration. The number of retirees receiving payments increased from 658,811 to 819,411, while total benefits paid rose from ₦2.3 trillion to ₦3.44 trillion.

Monthly pension payments advanced by 22 per cent from ₦12.2 billion to ₦14.9 billion. More than 195,000 retirees from treasury-funded ministries, departments and agencies also benefited from a ₦32,000 adjustment linked to the implementation of the national minimum wage.

PFAs have been directed to process retirement-benefit applications within 48 hours. The requirement is intended to reduce delays that have historically prevented eligible retirees from receiving their savings promptly.

PenCom also recovered ₦36.6 billion in pension contributions that employers had failed to remit.

Stronger enforcement is important because an employer may deduct pension contributions from a worker’s salary without transferring the money to the worker’s Retirement Savings Account.

Such defaults deny contributors both their principal and the investment income the funds could have generated.