The Contributory Pension Scheme experiences a significant increase of N5.94tn within a span of three years, as reported by PenCom.

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admin October 29, 2023
Updated 2023/10/29 at 7:13 PM

Mrs. Aisha Dahir-Umar, the Director General of the National Pension Commission (PenCom), has announced that there has been a significant increase of N5.94 trillion in pension assets under the Contributory Pension Scheme (CPS) over the past three years.

The CPS is a system where both the employer and employee contribute a portion of the employee’s salary towards their pension payments upon retirement.

During a conversation with journalists about the progress of the Nigerian pension industry, Mrs. Dahir-Umar also highlighted the commission’s successful efforts in improving the efficiency and transparency of the scheme. She noted that the scheme’s total value has risen from N11.35 trillion in August 2020 to N17.29 trillion in August 2023. Additionally, over one million new contributors have joined the CPS during this time frame.

Mrs. Dahir-Umar also emphasized that a remarkable achievement of the commission has been the recapitalization of the Pension Fund Administrators’ (PFAs) shareholders’ fund, increasing it from N1 billion to N5 billion.

She said that due to the significant increase in registered contributors and pension assets, PFAs needed more capital injection to fulfill minimum service standards and address operational needs in the pension industry.

The successful completion of the recapitalization exercise has made PFAs financially stronger and better equipped to provide quality service to RSA holders.


Umar also mentioned that allowing a portion of the RSA to be used for mortgages has been beneficial. Since the implementation of the guidelines until August 31, 2023, PenCom has approved 339 applications totaling over N4 billion for the payment of residential mortgage equity contributions.

In 2022, PenCom released the guidelines on accessing retirement savings account (RSA) balance for the payment of equity contribution towards a residential mortgage. These guidelines implement the provisions outlined in Section 89 (2) of the Pension Reform Act (PRA) 2014, which allows Pension Fund Administrators to use a portion of the pension assets in an RSA for the purpose of paying the equity contribution for a residential mortgage.

This achievement by PenCom aims to facilitate homeownership for employees even while they are still working. The Nigerian pension industry has experienced significant growth in assets under management, leading to increased savings mobilization, development in the capital market, and overall economic growth.

She observed that pension funds have been utilized to invest in infrastructure projects such as waste management, independent electricity generation, and road construction (Sukuk).

Furthermore, she mentioned that pension assets have contributed to the availability of long-term funds for investment in the real sector of the economy. Notable infrastructure initiatives financed with pension funds include the construction of roads across all six geopolitical zones through the Sukuk program, the Akute power plant, and the Island power plant.

Additionally, other projects financed with pension funds include Pipp Genco, Gasco Marine Limited, and the development of 1200 hostel rooms at the University of Calabar in Cross River State.

She explained that ultimately, an improved economy and financial system directly benefit individual pension contributors by providing them with improved returns on their pension savings and enhanced payouts upon retirement.

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