Pension remains on growth trajectory in the first quarter of 2025 driven by expanding coverage and growing returns.
The growth according to industry regulator, the National Pension Commission (PenCom) was boosted by favourable macroeconomic indicators, enhanced regulatory compliance, and consistent investment returns.
Omolola Oloworaran, director general, PenCom the first quarter recorded appreciable increases in Retirement Savings Account (RSA) enrolment, pension contributions, and assets under management, reflecting broad-based sectoral resilience.
She said progress was also recorded in expanding pension coverage to the informal sector through the Micro Pension Plan (MPP), noting that these trends underscore the continued strength and strategic relevance of the Contributory Pension Scheme (CPS) as a long-term savings and retirement security framework.
Growth in Coverage and Pension Assets
The total number of Retirement Savings Accounts (RSAs) increased from 10.58 million in Q4 2024 to 10.69 million in Q1 2025, reflecting the registration of 105,993 new RSAs during the period. This growth was largely attributed to rising pension awareness among younger Nigerians, who constituted over 82 percent of new enrolees, alongside sustained stakeholder sensitisation efforts and strengthened regulatory enforcement.
At the same time, the industry’s Net Asset Value (NAV) grew by N816 billion, representing a 3.63 percent increase from N22.51 trillion in Q4 2024 to N23.33 trillion at the end of March 2025. This growth was driven by regular contribution inflows, gains in the equities market, and improved yields from fixed-income investments.
Expansion of the Micro Pension Plan
The Micro Pension Plan recorded measurable progress during the quarter, with 13,889 new contributors registered by 15 Pension Fund Administrators (PFAs), bringing the cumulative number of Micro Pension Contributors (MPCs) to 186,825.
Total contributions under the MPP stood at N111.27 million, while contingent withdrawals of N4.73 million were processed for 17 contributors. Access ARM Pensions Limited led industry performance in this segment, accounting for nearly 75 percent of new MPC registrations. While this leadership is commendable, the disparity also highlights the need for more active participation by other PFAs to promote balanced growth and ensure broader coverage of informal workers across the country.
Pension Contributions and Compliance
In Q1 2025, total pension contributions stood at N389.17 billion, comprising N185.93 billion indicating 52.22 percent, from the public sector and N203.24 billion, that is 47.78 percent from the private sector.
“This near parity reflects a maturing compliance culture among private sector employers and continued consistency in remittances from public institutions.”
Furthermore, the Commission issued 7,389 Pension Clearance Certificates (PCCs) to eligible organizations, nearly 300 percent increase from the number issued in the previous quarter. These certificates were linked to contribution remittances on behalf of 245,774 employees, amounting to a total of N153.81 billion. The sharp increase aligns with the typical year-beginning compliance peak, as employers seek certification for business and government transactions.
Compliance Enforcement and Recovery Activities
During the quarter, the Commission strengthened its enforcement efforts to recover unremitted pension contributions. A total of N1.35 billion was recovered from 19 defaulting employers, comprising N972.12 million in outstanding pension contributions and N381.88 million in associated penalties. Furthermore, 12 persistently non-compliant employers were referred to the Commission’s Legal Department for prosecution.
“These actions reflect the Commission’s firm commitment to protecting pension assets and upholding the provisions of the Pension Reform Act 2014.
Macroeconomic Risks and Sectoral Challenges
Despite favourable developments, inflationary pressure remains a critical concern. Although headline inflation declined from 33.5 percent in December 2024 to 23.18 percent in February 2025, the elevated rate continues to erode the real value of pension assets and retirement incomes. The industry also grapples with lingering risks such as employer defaults, uneven PFA participation in the MPP, and delayed adoption of the CPS by several State Governments.
In addition, the continued dominance of a few top-tier PFAs in both RSA and MPP registrations, points to a structural imbalance within the industry. This highlights the urgent need for broader engagement and improved performance by other PFAs, particularly in the Micro Pension segment. “Strengthening outreach, enhancing operational capacity, and deepening commitment across all PFAs will be critical to achieving equitable growth and expanding pension coverage among informal sector workers, the Commission said.
Strategic Priorities for Q2 2025
For the second quarter of 2025, PenCom focus is intensify the recovery of unremitted contributions through legal actions and expansion of recovery agent efforts, encourage PFAs to explore additional investment-grade instruments to reduce over-reliance on FGN securities, scale up sensitisation campaigns and offer regulatory incentives to drive broader participation in the Micro Pension Plan, accelerate advocacy for CPS adoption among States, especially those at the legislative stage, enhance data integration, PIN validation interfaces, and real-time supervision through tech adoption, as well as expand training for judiciary and pension industry actors to improve pension litigation outcomes and governance.
