The National Pension Commission (PenCom) has introduced a redesigned pension framework, the PenCom Personal Pension Plan, aimed at extending coverage to Nigeria’s vast informal workforce.
With over 80% of the nation’s labor force working outside the formal sector, the initiative is designed to bridge the retirement security gap and tackle long-standing barriers that have slowed uptake of pensions among artisans, traders, entertainers, and other self-employed Nigerians.
Why the PenCom Personal Pension Plan Matters
Since the launch of the Micro Pension Plan in 2019, progress has been modest. Official figures show that only around 200,000 contributors had signed up, with assets under management hovering around ₦1 billion.
This is a far cry from the millions of Nigerians engaged in the informal economy, underscoring the urgent need for reform.
Speaking at the 2025 Annual Conference of the Nigerian Association of Insurance and Pension Editors, PenCom’s Director-General, Mrs. Omolola Oloworaran, represented by Head of Corporate Communications, Mr. Ibrahim Buwai, emphasized the importance of simplifying the system.
“The consensus is that Nigeria’s labor 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,” Buwai explained.
The PenCom Personal Pension Plan represents a rebranding and restructuring of the Micro Pension Plan, with a stronger focus on accessibility and inclusivity.
One of the key innovations of the new pension framework is the integration of technology-enabled registration and the use of licensed Super Agents, similar to mobile money operators.
PenCom believes this approach will break down onboarding barriers and make pension registration as simple as performing a PoS transaction.
“Our aim is to make the process seamless. With fintech partnerships and agent networks, we can ensure that every informal worker, from market women to musicians, can sign up for the PenCom Personal Pension Plan without stress,” Buwai said.
The regulator is also considering the licensing of specialized Micro Pension Fund Administrators to focus solely on managing these accounts.
This is expected to improve efficiency, deepen financial inclusion, and ensure long-term sustainability.
Beyond registration, PenCom is reassessing how pension funds are invested. Officials noted that more focus would be placed on channeling resources into infrastructure and private equity projects.
The goal is to balance national development needs with the protection of contributors’ funds.
This shift is particularly important as inflation continues to erode the value of retirement savings. By diversifying investments, PenCom hopes to secure better returns while also supporting Nigeria’s economic growth.
Experts say that expanding coverage through the PenCom Personal Pension Plan is not just about technology and access but also about trust and financial literacy.
During the conference, Mr. Adetunbi Ashaye, Head of Operations at Pathian Partners Limited, highlighted the need for education.
He explained that many Nigerians still underestimate the importance of pensions, often choosing immediate consumption over long-term savings.
“Many retirees in the past received nothing because the old pension system was unfunded.
The current contributory scheme is transparent and trackable, but people need to understand this.
Financial education is as important as technology in ensuring the success of the PenCom Personal Pension Plan,” Ashaye said.
The new plan is designed to cater not only to artisans and petty traders but also to professionals in entertainment, sports, technology, and other non-traditional sectors.
By segmenting the scheme into different categories, PenCom aims to reflect the diverse realities of Nigeria’s informal economy.
This inclusivity could be transformative, giving millions of Nigerians access to structured retirement savings for the first time.
While the rebranded plan is ambitious, questions remain about execution. Nigeria has a history of strong policies undermined by weak implementation.
Analysts warn that unless PenCom aggressively tackles issues such as low trust in financial institutions, weak awareness, and economic hardship, uptake may remain limited.
Nevertheless, optimism is growing. With stronger regulatory oversight, broader fintech collaboration, and grassroots education campaigns, the PenCom Personal Pension Plan could succeed where the Micro Pension Plan struggled.
For many Nigerians in the informal sector, this scheme may be the first real opportunity to build retirement savings in a safe and structured manner.
If well implemented, it could expand social protection, reduce old-age poverty, and reshape the country’s pension landscape.
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