Nigeria’s pension industry continues to expand, with Retirement Savings Account (RSA) membership rising nearly 16 percent over the past four years, increasing from 9.5 million in 2021 to over 11 million in 2025 as the Contributory Pension Scheme (CPS) deepens its reach.
Yet the pace of growth remains constrained by structural challenges, including limited participation in the formal sector, slow adoption of the scheme by several state governments, and persistent cases of employer non-remittance.
The gaps underscore the broader challenge of extending pension coverage across Africa’s most populous nation despite the industry’s rapid asset growth, according to analysts.
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Analysts at the Pension Fund Operators Association of Nigeria (PenOp) say Retirement Savings Account (RSA) membership has grown steadily from 9,529,127 in 2021 to 11,040,227 in 2025, representing an approximate 15.9 percent increase over the period.
“This reflects continued expansion of the CPS and sustained onboarding of new contributors,” they noted.
According to the analysts, while new registrations continue to improve, overall growth remains moderate. “This is largely attributable to structural factors, including low participation within Nigeria’s formal sector, the fact that several states are yet to fully adopt the CPS, and instances of non-remittance by some employers.”
They said that despite these challenges, the pension industry has evolved significantly.
“Enhanced data recapture initiatives have strengthened the integrity of the contributor database, while the licensing of over 10 Pension Support Service Providers (PSSPs) has improved access and simplified contribution processes.”
“On the investment front, the revised Investment Guidelines have expanded portfolio flexibility, positioning pension funds not only to preserve capital but also to optimise long-term returns within prudent risk parameters.”
PenOp said the industry’s resilience is further reflected in total Assets Under Management (AUM), which now exceed N27.5 trillion, underscoring the growing importance of pension funds in Nigeria’s financial markets and long-term capital formation.
“The pension landscape continues to evolve, with reforms, market innovation, and deeper institutional participation shaping the next phase of growth.”
Looking at the structural gap across states, adoption of the CPS remains uneven, revealing a significant gap that continues to limit nationwide pension coverage.
Across the country, only 11 states and the Federal Capital Territory (FCT) have fully implemented the CPS. Full implementation implies that these states have enacted the required legislation, established pension bureaus, registered workers with Pension Fund Administrators (PFAs), and consistently remit pension contributions.
The states include Lagos, Osun, Kaduna, Ekiti, Edo, Ondo, Delta, Benue, Anambra, and Jigawa, alongside the Federal Capital Territory. These jurisdictions are widely regarded as benchmark implementers of pension reform, providing relatively predictable retirement benefits and building sustainable structures for long-term pension funding.
However, a much larger group of states has only partially embraced the reform. About 20 states have enacted CPS laws but have yet to fully operationalise the system, largely due to fiscal constraints, legacy pension liabilities, and delays in building the institutional frameworks required for full implementation.
These states include Abia, Adamawa, Bauchi, Bayelsa, Ebonyi, Enugu, Gombe, Imo, Kano, Katsina, Kebbi, Kogi, Nasarawa, Niger, Ogun, Oyo, Rivers, Sokoto, Taraba, and Zamfara. In many of these jurisdictions, contribution remittances remain irregular, pension bureaus are either weak or still evolving, and actuarial valuations as well as funding arrangements for accrued pension rights have not been fully completed.
In addition, at least six states have yet to commence implementation of the CPS framework, leaving workers largely under the old Defined Benefits Scheme. These states include Akwa Ibom, Borno, Kwara, Plateau, Cross River, and Yobe.
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The absence of reform in these areas exposes workers to uncertain retirement benefits and heightens the risk of mounting pension arrears, which historically plagued the old system.
Several structural and institutional factors continue to explain the slow pace of adoption across states. Many governments are still grappling with legacy pension liabilities inherited from the Defined Benefits Scheme, while limited fiscal capacity constrains their ability to fund accrued pension rights and meet regular contribution obligations.
In some cases, institutional readiness gaps, such as the absence of fully functional pension bureaus, inadequate actuarial frameworks, and administrative capacity limitations have slowed implementation.
Political and administrative delays in passing enabling legislation have also contributed to the uneven pace of reform, alongside the limited enforcement powers available to the federal regulator in compelling subnational governments to comply.
