Micro pension contributions rise 42% as 91% of accounts stay dormant

Contributions under Nigeria’s Personal Pension Plan increased sharply in the first quarter of 2026, but the growth came against a backdrop of widespread inactivity among registered accounts.

The latest figures from the National Pension Commission show that contributors paid N147.16 million into the scheme between January and March 2026, representing a 42.46 per cent increase from the N103.30 million recorded in the preceding quarter.

The increase added N43.86 million to quarterly inflows and took total contributions since the scheme began to N1.66 billion, according to PenCom’s Q1 2026 pension industry report.

Despite the stronger inflows, the report showed that participation remains shallow, with more than nine out of every 10 registered accounts yet to receive any contribution.

PenCom recorded 219,316 registrations under the scheme from inception to the end of the first quarter. Of this number, only 18,811 accounts, representing 8.6 per cent, had been funded, leaving 200,505 accounts dormant.

Financial analysts said the contrasting figures point to both growing interest in voluntary retirement savings and difficulties in sustaining participation among workers in the informal economy.

A Lagos-based stock market trader and pension analyst, Ade Ojapa, said the rise in contributions suggested that existing contributors were putting more money into their accounts, but warned that registration alone was not translating into meaningful pension savings.

“The 42 per cent increase in quarterly inflows demonstrates that active participants are beginning to deposit larger volumes,” Ojapa said, adding that the large number of dormant accounts showed the difficulty of converting enrolment into sustained contributions.

An official of the Pension Fund Operators Association of Nigeria attributed the low participation partly to the unpredictable earnings of informal workers.

Unlike salaried employees whose pension deductions are made automatically through payroll systems, informal workers have to make voluntary payments from incomes that can fluctuate considerably, the official said.

The Micro Pension Plan was introduced to bring self-employed Nigerians and workers outside the formal employment system into the Contributory Pension Scheme.

The arrangement provides greater flexibility in contributions and allows participants to withdraw up to 40 per cent of their accumulated savings for contingencies before retirement, while the remaining 60 per cent is reserved for retirement benefits.

With the informal sector accounting for a substantial share of Nigeria’s workforce, pension operators and financial inclusion advocates see the sector as critical to expanding retirement coverage.

Economist and financial inclusion advocate, Dr Kemi Ojo, called for stronger use of digital payment systems and partnerships with organisations that already have access to informal workers.

She suggested that PenCom and Pension Fund Administrators work with microfinance institutions and trade unions to facilitate small, regular deductions, including through mobile and USSD platforms.

Stakeholders said such measures, alongside sustained public awareness, would be necessary to turn the more than 200,000 unfunded accounts into regular pension savings and deepen retirement protection among informal workers.