PenCom Remodels Pension Plan, Targets Informal Sector

The National Pension Commission, (PenCom) has announced new measures to expand pension coverage in Nigeria’s vast informal sector by leveraging super agents and financial technology platforms to simplify onboarding into the country’s rebranded Personal Pension Plan.

The initiative was disclosed at the recent 2025 Annual Conference of the Nigerian Association of Insurance and Pension Editors, themed “Strengthening Insurance and Pension Frameworks for Better Economy.”

Since the launch of the Micro Pension Plan in 2019, uptake has remained modest. With around 200,000 contributors and about N1bn in assets under management, the scheme has not gained the expected traction among Nigeria’s millions of informal workers.

Mrs Omolola Oloworaran, PenCom Director-General, represented by the Head of Corporate Communications, Mr Ibrahim Buwai, acknowledged that onboarding difficulties have been a major barrier to the scheme’s growth.

“The consensus is that the labour force largely resides in the informal sector. How do we bring them into the contributory pension scheme? This is even more important in a country like Nigeria, where the social safety net is weak. Pension is what will come in handy,” Buwai said.

To address these challenges, PenCom is redesigning the Micro Pension Plan under a new name: The Personal Pension Plan. The new scheme will be stratified into three categories to reflect the diversity within the informal sector.

According to Buwai, the plan is not limited to artisans or small-scale traders but also includes entertainers, sportsmen, and other self-employed individuals operating independently.

“The most important thing is to address onboarding challenges. Technology-enabled registration is part of what we are looking at. Our aim is to make the process as simple as using a PoS terminal to withdraw or deposit money,” he explained.

PenCom disclosed that with the growing role of fintechs in Nigeria, the regulator is considering the use of licensed Super Agents to handle onboarding on behalf of Pension Fund Administrators. “This speaks to the issue that we need to license Micro Pension PFAs so that this model will enable us to achieve that purpose,” Buwai added.

By integrating technology and agent networks, the commission hopes to break down barriers preventing millions of informal sector workers from saving for retirement.

Beyond expanding coverage, PenCom is also reviewing its investment strategies.

Buwai noted that “the commission is intensifying efforts to channel pension funds into infrastructure and private equity. This approach seeks to balance Nigeria’s economic development goals with the need to safeguard contributors’ real returns, especially amid rising inflation.”

During a panel session, Mr Adetunbi Ashaye, Head of Operations at Pathian Pensions, emphasized the importance of financial education in strengthening confidence in Nigeria’s Contributory Pension Scheme.

He observed that some retirees request to withdraw their entire savings at retirement due to fears of receiving insufficient monthly stipends.

“People forget that pension reforms came about because the old system was unfunded, and many retired without getting anything. Now, the system is funded through contributions from employers and employees, making it trackable and highly regulated,” Ashaye clarified.

He argued that the real task lies in boosting financial literacy, adding “Many Nigerians consider pensions insignificant because of immediate needs like food, shelter, and clothing. But we need to simplify, digitize, and diversify the Micro Pension Plan to make it more attractive and accessible.”