Experts warn of looming old-age poverty crisis
By AYOOLA OLAOLUWA
Nigeria’s pension industry is facing a troubling reality as more than 92 per cent of registered Retirement Savings Accounts (RSAs) remain unfunded, raising concerns about the future financial security of millions of workers.
The development has exposed deep gaps in pension participation despite nearly two decades of reforms aimed at expanding retirement coverage across the country.
Industry data obtained by Business Hallmark at the weekend showed that while millions of Nigerians have opened pension accounts, only a small fraction are actively receiving contributions from employers or account holders.
The National Pension Commission (PenCom) stated in its fourth quarter 2025 report that efforts to include informal sector workers in the Personal Pension Plan (PPP) which caters to the informal sector has remained stagnant.
According to the commission, while the PPP has 215,412 registered Retirement Savings Accounts, only 17,320 of these RSAs, which represents 8.0 per cent, have received contributions, while the remaining 198,092 RSAs, which represent 92.0 per cent, are dormant.
The commission explained that registrations are not savings and that registration without funding is creating a misleading picture of inclusion.
“We will accelerate engagement and onboarding under the Accredited Pension Agent framework; Activate accredited agents; deepen distribution partnerships with cooperatives, fintechs, telcos, trade unions, and professional associations; and drive sustained sensitisation campaigns to bring informal sector workers, MSMEs, gig workers, and self-employed Nigerians onto the Personal Pension Plan”, PenCom stated.
On adoption of the Contributory Pension Scheme (CPS) by state governments, PenCom stated that adoption by state governments remained stalled in Q4’25.
“The position is more uneven than a simple Bureau count conveys. Only eight states are fully compliant with the CPS. A further seventeen States have passed pension reform legislation but have not yet moved to implementation; a population that should now be the principal focus of bilateral compliance engagement.
“Jigawa State runs a fully implemented Contributory Defined Benefits Scheme. Kano State, despite progress on enabling legislation, is operating outside the regulatory architecture: its pension funds are still held with commercial banks rather than being placed under licensed Pension Fund Administrators”.
Speaking on the report, the Director General of PenCom, Ms. Omolola Oloworaran, said that the overarching goal of the pension scheme is to build a resilient system.
“Our objective is clear, to build a market that works efficiently and sustainably for all pension contributors”.
Reacting to the development, industry analysts said the situation reflects the combined effects of widespread unemployment, informality in the labour market, weak compliance by some employers and the rising cost of living that continues to squeeze household incomes.
A top director in one of Nigeria’s leading insurance companies, Mr. Jide Badmus, said the alarming figure has renewed fears of a retirement crisis.
“A large segment of the population could enter old age without adequate financial support. Unless participation rates improve significantly, the country’s pension system may fall short of its objective of providing sustainable income security for retirees.
Another industry expert, Ngozi Orji, demanded stronger enforcement of pension regulations, broader inclusion of workers in the informal sector and increased public awareness on the importance of retirement planning.
“Addressing the growing number of dormant accounts is critical to safeguarding the future welfare of Nigeria’s workforce”, she said.