Personal Pension Plan Target Threatened By 91% Unfunded Accounts

The National Pension Commission (PenCom) has warned that the Personal Pension Plan’s (PPP) target to have 30 per cent of accounts funded by the fourth quarter of 2026 is unlikely to be met.

The regulator attributed the shortfall to the persistent gap between account registration and actual savings, compounded by weak contribution habits among enrollees.

Data from the latest Nigerian Pension Industry Quarterly Report indicate that of the 219,316 PPP accounts opened under the scheme, only 18,811 have ever received a contribution.

This represented a funded ratio of about 8.5 per cent, leaving roughly nine in ten registered accounts empty.

The commission said the industry had focused too much on headline registration numbers instead of building a genuine savings culture. It warned that unless operators change how they engage subscribers and redesign products, the 30 per cent funded-ratio target would not be realistic.

PenCom said it would measure pension inclusion by the number of accounts actually funded, not just those on paper. It added that the PPP attracted just N147.16 million in contributions during the quarter, bringing total inflows since launch to N1.66 billion — a modest amount compared with the number of accounts opened.

To boost funding, PenCom said it would require Pension Fund Operators to meet specific funding-conversion targets, expand its network of Accredited Pension Agents, and pursue partnerships with cooperatives, fintechs, telecoms, trade unions and professional bodies to move informal-sector workers from registration to regular contributions.

PenCom said competition among Pension Fund Administrators (PFAs) is increasing.

It reported that the five biggest operators accounted for 54.41 per cent of new Retirement Savings Account (RSA) sign-ups in Q1 2026, down from 62.11 per cent the previous quarter, indicating smaller players are gaining ground.

PenCom said Stanbic IBTC Pension Managers led new RSA registrations with 25,024 (17.47 per cent), followed by AccessARM Pensions (10.63 per cent), FCMB Pensions (10.15 per cent), TangerineAPT Pensions (9.65 per cent) and Trustfund Pensions (6.73 per cent). The regulator noted TangerineAPT’s rise into the top five as evidence of a shifting competitive landscape.

PenCom said total RSA registrations rose from 11.04 million at the end of 2025 to 11.18 million by the end of Q1 2026, adding 143,248 new accounts. The commission attributed the increase to improved digital onboarding and public sensitisation. It added that only about 12.1 per cent of Nigeria’s 92 million-strong workforce are active contributors, highlighting the large untapped informal sector.

PenCom stated that  75.31 per cent of new RSAs in the quarter belonged to people under 40, a trend it called a major long-term asset for the industry. The commission said the younger contributor base should support a shift in fund allocation from a heavy reliance on government securities toward more growth-oriented investments.

PenCom said 15 PPP contributors withdrew a combined N11.12 million under the scheme’s contingent withdrawal facility during the quarter. It added that the 91 per cent unfunded rate for PPP accounts is only a slight improvement on a 92 per cent unfunded rate reported in Q4 2025.

The commission also reminded stakeholders that total pension contributions in the earlier quarter were far higher at N903.7 billion, with private-sector contributions of N352.74 billion and public-sector remittances of N550.96 billion, which rose sharply on improved compliance and arrears settlement.

On the proposed reforms, PenCom said that authorities are seeking amendments to the Pension Reform Act 2014, including a possible increase in employers’ statutory contributions. It noted that employers currently pay a minimum of 10 per cent and employees 8 per cent, for a combined mandatory rate of 18 per cent, and that the Organised Private Sector has opposed any rise, saying it would increase business costs.