{"id":4250,"date":"2026-10-30T14:16:54","date_gmt":"2026-10-30T14:16:54","guid":{"rendered":"https:\/\/globalnigerianews.com\/index.php\/2026\/10\/30\/private-sector-workers-retire-into-poverty-as-pencom-seeks-pension-reform-businessday-ng\/"},"modified":"2026-10-30T14:16:54","modified_gmt":"2026-10-30T14:16:54","slug":"private-sector-workers-retire-into-poverty-as-pencom-seeks-pension-reform-businessday-ng","status":"publish","type":"post","link":"https:\/\/globalnigerianews.com\/index.php\/2026\/10\/30\/private-sector-workers-retire-into-poverty-as-pencom-seeks-pension-reform-businessday-ng\/","title":{"rendered":"Private sector workers retire into poverty as PenCom seeks pension reform \u2013 Businessday NG"},"content":{"rendered":"

\u2026Targets 3m new accounts<\/strong><\/em>\n<\/p>\n

\u2026Sets June 2027 deadline for operators\u2019 recapitalisation<\/strong><\/em>\n<\/p>\n

Private sector workers in Nigeria are retiring with inadequate pensions, with almost 70% earning below the national minimum wage in retirement, the National Pension Commission (PenCom) has said, pushing for reforms to expand coverage, improve retirement benefits and strengthen the pension industry.\n<\/p>\n

Omolola Oloworaran, Director-General of PenCom, stated this at the Summit Day of the National Pension Week 2026 in Abuja on Thursday, warning that the Country\u2019s pension system must move beyond accumulating assets to ensuring that workers can maintain a dignified standard of living after retirement.\n<\/p>\n

She said more than 55% of retirees whose pensions fall below the minimum wage come from the private sector, highlighting the gap between pension contributions and the benefits workers ultimately receive.<\/p>\n

She argued that the problem was partly linked to the calculation of pension contributions on pensionable earnings rather than workers\u2019 full earnings, leaving some employees with retirement benefits based on only a fraction of their actual pay.\n<\/p>\n

Under the existing framework, the combined mandatory pension contribution is 18% of an employee\u2019s monthly emoluments, comprising 10% from the employer and eight percent from the employee. However, Oloworaran noted that the contribution base limits the amount ultimately saved for retirement.\n<\/p>\n

She contrasted Nigeria\u2019s system with Australia, where a 12% employer contribution rate applies to workers\u2019 ordinary earnings, saying Nigeria\u2019s higher nominal contribution rate does not necessarily translate into better retirement outcomes.\n<\/p>\n

\u201cOur private sector workers are retiring into poverty. This must change.\n<\/p>\n

\u201cA worker can earn a decent wage and still retire on a pension calculated from just a fraction of it,\u201d Oloworaran said.<\/p>\n

The PenCom DG called on private sector employers to contribute more meaningfully to efforts to guarantee minimum retirement benefits, noting that the Federal Government and the pension industry were already contributing to the Pension Protection Fund.\n<\/p>\n

She urged employers to support the fund so that the cost of protecting low-income retirees would not rest on public resources alone.\n<\/p>\n

\u201cThe Federal Government is contributing to the Pension Protection Fund. The pension industry is contributing. It is time for the private sector to join them so that the minimum pension guarantee rests on the shoulders of all who benefit from the labour of Nigerian workers and not on the public purse alone,\u201d she said.\n<\/p>\n

Oloworaran also warned that pension adequacy depended not only on contributions but on the ability of pension fund administrators to generate returns that outpace inflation.\n<\/p>\n

\u201cA contribution that is faithfully paid and then quietly eroded by inflation is a promise broken in slow motion. The only return that matters to a retiree is the real return when our savings end above the rising prices.\u201d she said, adding that delivering returns above inflation was a responsibility of pension operators.<\/p>\n

She said the Commission would use the powers available under the Pension Reform Act to recover unpaid contributions and address employers\u2019 non-compliance, describing the failure to remit deducted pension contributions as a threat to workers\u2019 future financial security.\n<\/p>\n

\u201cWhen an employer deducts workers\u2019 pension contribution and fails to remit it, that is not an administrative lapse. It is a step from the future of a Nigerian family,\u201d she said.\n<\/p>\n

PenCom targets three million new pension accounts<\/h3>\n

As part of efforts to extend pension coverage beyond formal employment, Oloworaran said PenCom had secured commitments from pension fund administrators to open three million additional funded active pension accounts within one year.\n<\/p>\n

The initiative is intended to bring more informal-sector workers, including traders, artisans, farmers, transport workers and self-employed Nigerians, into the Contributory Pension Scheme through personal pension plans, accredited pension agents and digital onboarding.\n<\/p>\n

\u201cFor 20 years, our scheme has followed the salaries. Now it must follow the worker to the market, to the motor park, the farm cluster, and the food in every pocket,\u201d she said.<\/p>\n

She stressed that the target was for funded active accounts rather than registrations alone, arguing that opening an account without contributions would do little to secure a worker\u2019s retirement.\n<\/p>\n

\u201cAn empty account is a statistic, but a funded account is a future,\u201d she said.\n<\/p>\n

The expansion drive forms part of what Oloworaran described as a shift from a pension system focused largely on payroll workers to one that protects a broader share of the population.\n<\/p>\n

She said a national pension system should not exclude people simply because they work outside the formal employment structure, adding that the personal pension plan would provide a pathway for self-employed Nigerians to save towards retirement.\n<\/p>\n

Minimum pension guarantee, healthcare plan<\/h3>\n

Oloworaran also announced that President Bola Tinubu was expected to launch a Pension Security Initiative on November 10, subject to the stated schedule.<\/p>\n

According to her, the initiative would include a minimum pension guarantee and a healthcare programme for retirees, which she referred to as Pancare.\n<\/p>\n

She said the minimum pension guarantee, contemplated under Sections 82 and 84 of the Pension Reform Act 2014, should no longer remain an unfulfilled promise after years of waiting.\n<\/p>\n

The initiative is intended to provide a safety net for the poorest retirees and reduce the risk of older Nigerians having to choose between essential medicines and food.\n<\/p>\n

\u201cNo Nigerian who has served and worked for this nation and has saved for retirement should grow old in want,\u201d she said.\n<\/p>\n

Oloworaran described the planned intervention as a shift from merely encouraging retirement savings to providing a stronger measure of security for pensioners.<\/p>\n

She also emphasised that the effectiveness of the initiative would depend on sustainable funding, employer participation and a pension system capable of protecting the value of contributors\u2019 savings.\n<\/p>\n

Operators face June 2027 recapitalisation deadline<\/h3>\n

In a separate measure to strengthen the industry, Oloworaran said all pension fund administrators and pension fund custodians must complete their recapitalisation by June 30, 2027.\n<\/p>\n

\u201cWe are not changing our minds,\u201d she said, insisting that the commission would hold operators to the deadline.\n<\/p>\n

She said recapitalisation was intended to ensure that institutions managing the retirement savings of millions of Nigerians had the financial strength to protect contributors\u2019 funds and meet their responsibilities.\n<\/p>\n

The Commission also expects operators to improve investment discipline, align investment strategies with the periods when contributors will need their money and deliver returns that preserve the purchasing power of pension savings.<\/p>\n

\u201cSize is what we have achieved. Strength is what we now demand,\u201d Oloworaran said.\n<\/p>\n

She added that the next phase of pension reform would focus on improving the quality of the industry rather than merely increasing the volume of assets under management.\n<\/p>\n

Pension assets to support development<\/h3>\n

Oloworaran said Nigeria\u2019s pension assets could help finance infrastructure, housing, power and enterprise, provided investments were made with prudence, transparency and sound risk management.\n<\/p>\n

She cautioned, however, that pension savings must not be treated as government funds or as resources that could be deployed without regard to contributors\u2019 interests.\n<\/p>\n

\u201cPension money is not government money. It is not industry money. It is the deferred wages of Nigerians and working Nigerian workers,\u201d she said.<\/p>\n

According to her, investments in national development should first deliver appropriate risk-adjusted returns and protect the interests of contributors before producing wider economic benefits.\n<\/p>\n

\u201cNigerian savings can finance the power, the roads, housing, and enterprise that will create the next generation of contributors. Every investment must first serve the contributor. When it does, it can also serve the country,\u201d she said.\n<\/p>\n

She added that the Commission would continue to press for stronger compliance, better investment performance and wider pension coverage, while calling on state governments to complete the transition to the Contributory Pension Scheme.<\/p>\n

\n

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Businessday NG<\/div>\n","protected":false},"excerpt":{"rendered":"

\u2026Targets 3m new accounts \u2026Sets June 2027 deadline for operators\u2019 recapitalisation Private sector workers in Nigeria are retiring with inadequate pensions, with almost 70% earning below the national minimum wage… <\/p>\n","protected":false},"author":1,"featured_media":4251,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-4250","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"_links":{"self":[{"href":"https:\/\/globalnigerianews.com\/index.php\/wp-json\/wp\/v2\/posts\/4250","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/globalnigerianews.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/globalnigerianews.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/globalnigerianews.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/globalnigerianews.com\/index.php\/wp-json\/wp\/v2\/comments?post=4250"}],"version-history":[{"count":0,"href":"https:\/\/globalnigerianews.com\/index.php\/wp-json\/wp\/v2\/posts\/4250\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/globalnigerianews.com\/index.php\/wp-json\/wp\/v2\/media\/4251"}],"wp:attachment":[{"href":"https:\/\/globalnigerianews.com\/index.php\/wp-json\/wp\/v2\/media?parent=4250"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/globalnigerianews.com\/index.php\/wp-json\/wp\/v2\/categories?post=4250"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/globalnigerianews.com\/index.php\/wp-json\/wp\/v2\/tags?post=4250"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}