Personal Pension Plan Faces Funding Hurdle as 91% of Accounts Remain Unfunded

Nigeria’s Personal Pension Plan (PPP) is facing a major funding challenge, with about 91 per cent of registered accounts reportedly remaining unfunded, raising concerns over the effectiveness of efforts to expand pension coverage among workers outside the formal sector.

The scheme was introduced by the National Pension Commission (PenCom) to provide a structured retirement savings option for self-employed Nigerians and others who are not covered by the mandatory Contributory Pension Scheme.

Despite growing registration, the high proportion of accounts without contributions highlights the gap between enrolment and actual pension participation. It also points to challenges around income instability, awareness, trust and the ability of informal-sector workers to make regular contributions.

The development could complicate efforts to broaden Nigeria’s pension coverage and provide retirement security for millions of workers operating outside the formal economy.

For pension operators and regulators, the challenge is increasingly shifting from attracting new registrations to encouraging consistent contributions. Greater financial awareness, flexible contribution arrangements and stronger incentives could become important to making personal pension savings more sustainable.

The funding gap also underscores the wider challenge of bringing Nigeria’s large informal workforce into the formal financial system and building long-term domestic savings.