PenCom Targets 25 Million Contributors With Micro Pension

The Nigerian Pension Commission has said that its next target after the recently concluded recapitalisation exercise for Pension Fund Administrators is an aggressive push for micro pension.

The regulator is targeting a pension base with over 25 million contributors over the next ten years.

The Head, Surveillance Department of National Pension Commission (PenCom), Dr. Ehimeme Ohioma said this on “Business Express” while discussing the recapitalisation of pension fund administrators.

Nigeria’s pensions asset under management has risen to N13.6trn, up from the N2.7trn recorded back in 2012 when PFAs capitalisation was pegged at N1bn.

The last time the regulator came up with recapitalization was in 2012.

New licenses were issued to PFAs as of the end of the recent recapitalization which expired April 27, 2022 where PFAs minimum regulatory capital was increased to N5bn.

“Ten PFAs had met the new regulatory capital requirement of N5bn as at December 31, 2021, while the others intensified efforts to meet the April 27, 2022 deadline” PenCom said.

It added that this led to the reduction of the number of PFAs from 22 to 20.

Ohioma said the recapitalization has brought in new investors in the pensions industry.

He said, “For the Nigerian economy, once the scope of business is increased, it means the available pool of pension funds is available to the government, private sector to business enterprises to be able to access these funds and bring about development in the Nigerian economy.

“So, you now have increased pool of funds. The PFAs are able to go into more businesses like the micro pension scheme.

“I think that is the next stage in the pensions industry. The informal sector is much larger than the formal sector in Nigeria and so, currently, the number of the registered contributors is 9.5 million.

“But from statistics, the working population in Nigeria is between 60 million to 80 million. So, there is a lot of work to do.

“The commission has come up with the micro pensions scheme and it is going to be bigger than this formal sector. So, we expect to see in the next ten years, the number of registered contributors to increase from 9.5 million to not less than 20 million to 25 million.”

He said the just concluded recapitalization will improve the capacity of the PFAs to launch into micro pensions and provide more services to contributors.