PFA up N20.87 trillion as RSA holders hit 10.41 million – PenCom DG

The scheme requires contributions from both employers and employees, ensuring fully funded, portable, and accessible pension savings

Pension fund assets under Nigeria’s Contributory Pension Scheme (CPS) have reached N20.87 trillion, with over 10.41 million Retirement Savings Accounts (RSAs) as of July, the Acting Director General of the National Pension Commission, Omolola Oloworaran, has said.

Speaking Thursday at the Pension Correspondents Association of Nigeria (PENCAN) conference in Abuja, Ms Oloworaran highlighted the steady growth of pension assets as a major success story of the CPS, which has transformed pension administration in Nigeria over the last two decades.

Represented by the commission’s spokesperson, Ibrahim Buwai, Ms Oloworaran emphasised the positive impact of the CPS, which was introduced in 2004 to replace the inefficiencies of the Defined Benefit Scheme.

The scheme requires contributions from both employers and employees, ensuring fully funded, portable, and accessible pension savings.

“The consistent accumulation of pension fund assets since the commencement of the CPS remains a key performance indicator,” she stated, adding that the current pension fund liabilities, which stood at over N2 trillion before June 2004, have significantly been reduced.

The Acting DG also remarked on the expansion of the CPS to include workers from both the public and private sectors, further empowering individuals to make personal choices about their pension management.

“Retirement savings are now being remitted into individual Retirement Savings Accounts (RSAs), managed by Pension Fund Administrators (PFAs) and kept in custody by Pension Fund Custodians (PFCs),” she was quoted as saying.

This structure has allowed for greater transparency and security in managing pension contributions.

Reflecting on the progress made, Ms Oloworaran pointed out the launch of the Micro Pension Plan (MPP) in 2019 as a significant milestone in PenCom’s efforts to expand CPS coverage to Nigeria’s informal sector, the largest employer of labour in the country.

Despite the modest enrolment numbers so far, she acknowledged the potential of the MPP to offer self-employed individuals a secure retirement savings platform, with the Commission now focusing on transforming the plan to attract more participants.

“Our ultimate goal is to further social inclusion and reduce old-age poverty,” she said.

She also highlighted the introduction of an Online Enrolment Application, which automates the annual verification and enrolment process for prospective retirees from treasury-funded Ministries, Departments, and Agencies (MDAs).

“This innovation allows retirees to register, verify, and enrol through their mobile phones and other devices, eliminating the need for physical participation at enrolment centres,” Ms Oloworaran explained.

She also noted PenCom’s efforts to address the long-standing issue of delays in the payment of accrued pension rights for retirees of Treasury-funded MDAs, acknowledging that such delays undermine the core objective of the CPS.

However, she assured that concerted efforts are underway to resolve the backlog of outstanding payments and put in place mechanisms that ensure the timely release of funds.

Pension Enhancement Exercise

In addition, the Acting DG discussed the Pension Enhancement Exercise, which has allowed for the periodic increase in pension payments based on the growth in RSA balances.

“Many retirees benefited from the most recent pension enhancement in 2023,” she said.

While celebrating the gains of the CPS, Ms

Oloworaran cautioned that challenges remain, particularly in terms of public education and awareness.

She called on stakeholders, including the media, to intensify efforts to educate Nigerians about the benefits and provisions of the CPS, noting that many contributors are still unaware that employers can elect to increase their monthly contributions beyond the statutory minimum.