By Taiye Olayemi
As 2025 draws to a close, the pension industry is undergoing one of its most significant reform phases since the introduction of the Contributory Pension Scheme.
It is driven by tougher regulation, expanded coverage efforts and renewed confidence among retirees.
Central to the reforms is Pension Revolution 2.0, which the National Pension Commission (PenCom) described as the most comprehensive overhaul of the system since inception, targeting weak governance, limited coverage and inefficient processes.
A major highlight of the year was the Federal Government’s approval and disbursement of N758 billion to clear accumulated pension liabilities that had remained unresolved for years, signalling renewed commitment to pension obligations.
Regulatory enforcement also intensified, with pension recoveries from defaulting employers rising by 180 per cent, reflecting a stronger supervisory stance and improved inter-agency collaboration.
The introduction of Pension Boost 1.0 increased monthly pension payments, helping retirees cope with inflation, as aggregate monthly pension disbursements exceeded N14 billion by mid-2025.
PenCom also expanded the use of technology, fully automating remittance and benefit-processing platforms to reduce delays, improve transparency and eliminate administrative bottlenecks.
However, inspite of the gains, challenges persist, particularly debates around the planned recapitalisation of pension fund administrators and custodians, with higher minimum capital requirements set to take effect by June 2027.
Compliance gaps remain, especially among private sector employers and sub-national governments, while nationwide adoption of the Contributory Pension Scheme is still incomplete.
To address inclusion, the Micro Pension Plan was restructured into a Personal Pension Plan, aimed at attracting artisans, traders and other informal sector workers.
Experts, in an interview with the News Agency of Nigeria (NAN) on Sunday in Lagos, said the figures tell a story of growth, but not without caution.
Mr Ehimeme Ohioma, a pension consultant and former Head of Surveillance at PenCom, described 2025 as “largely successful,” citing the N758 billion bond issuance as a defining milestone.
He commended PenCom for revising key guidelines, including the planned increase in minimum share capital, noting that the objective was to strengthen operational capacity, expand physical presence and improve service delivery.
However, Ohioma sounded a note of restraint. “Pension fund administrators are essentially asset managers; excessive capital requirements could dilute returns on equity for shareholders.”
He also scknowledged the retail nature of pension administration, which demands capital for visibility, accessibility and nationwide reach.
Ohioma commended the engagement of payment solution providers, saying, “the reforms have addressed the long-standing issue of uncredited contributions caused by incomplete employer remittance schedules.
“While future cases have been curtailed, operators must still reconcile a large volume of historical unreconciled contributions.”
He described the year as one of significant transformation, while urging PenCom to further strengthen its supervisory capacity and enforce zero tolerance for infractions.
Similarly, Mr Aronkola Isaac, Principal Assistant Registrar in charge of the Pension Desk Office, Obafemi Awolowo University (OAU), commended PenCom for its regulatory and supervisory responsibilities.
Isaac said that in espite ofthe gains, there were still areas where improvement had become imperative.
According to him, chief among them is the remittance process for pension contributions by Federal Government Treasury-funded Ministries, Departments and Agencies (MDAs).
“Virtually all Treasury-funded MDAs are yet to fund their Retirement Savings Accounts more than six months after salaries have been paid.
“This situation clearly violates the statutory requirement of remittance within seven days,” he said.
Isaac raised concerns about diaspora retirees, noting that the newly introduced PenCom enrolment application, COBRA, does not adequately cater for retiring staff based abroad.
According to him, there is a need for the commission to deliberately integrate diaspora retirees into the application’s functionality to avoid their exclusion from the system.
On insurance benefits, Isaac urged PenCom to strengthen enforcement around the payment of Group Life Assurance (GLA) claims.
“PenCom should ensure that payments to the families of deceased employees fully comply with the provisions of the Pension Reform Act 2014,” he said.
He further called for the simplification of the process for accessing the 25 per cent pension-backed mortgage facility.
“The procedure remains unnecessarily cumbersome; contributors’ consent alone should be the only condition for withdrawal,” he said.
He suggested that the requirement to route the process through Primary Mortgage Institutions should be removed to make the facility more accessible.
From a retirement outcomes perspective, Dr Babatunde Raimi, a pension and retirement coach, said deeper reforms were still required to deliver true social security.
He called for stronger enforcement mechanisms, including real-time monitoring systems linked to employer payroll and tax data, alongside stiffer sanctions for chronic defaulters.
Raimi advocated mobile-enabled, low-cost onboarding solutions for informal workers, supported by fintech partnerships and grassroots awareness campaigns.
He also urged regulators to encourage diversified investments in infrastructure and sustainable projects, gradually reducing over-reliance on government securities.
“Pension benefits must be protected against inflation. I propose indexed payouts and periodic reviews of contribution rates to reflect economic realities.
“Transparency remains key to public trust. Clearer performance reports and faster grievance resolution are needed,” Raimi said.
From the operators’ standpoint, Ms Anthonia Ifeanyi-Okoro, Acting Managing Director of the Pension Fund Operators Association of Nigeria (PenOp), described Pension Boost 1.0 as a turning point.
“It marked a critical milestone in resolving long-standing challenges, particularly the settlement of accrued pension rights,” she said.
According to her, targeted policy actions and stronger coordination helped dismantle structural bottlenecks and restore confidence among retirees long denied their benefits.
Ifeanyi-Okoro explained that the industry is now firmly in the era of Pension Revolution 2.0, where sustainability, rather than legacy clean-up, has become the central focus.
She described the N758 billion bond provision as evidence of government commitment and highlighted initiatives such as the Personal Pension Plan and the Pension Compliance Certificate as tools expanding coverage and enforcement.
Looking ahead, she said PenOp would prioritise deeper stakeholder engagement, education and collaboration, while maintaining transparency and trust. NAN
