Nigeria's personal pension contributions rise 42% despite high dormancy rate

This surge pushed cumulative contributions under the scheme to N1.66 billion since its inception. Despite this growth in inflows, a significant structural challenge persists, as 91.4% of registered accounts, totaling 200,505 out of 219,316, remain dormant with zero financial contributions. Only 18,811 accounts are actively funded.

The Personal Pension Plan, launched under the Micro Pension Plan framework by the National Pension Commission PenCom, aims to extend the Contributory Pension Scheme to self-employed individuals and informal sector workers. Unlike formal sector employees whose contributions are deducted at source, informal workers contribute voluntarily, often facing challenges due to unpredictable incomes and economic conditions. Financial inclusion advocate Dr. Kemi Ojo suggests that PenCom and Pension Fund Administrators should collaborate with microfinance institutions and trade unions to automate micro-deductions through mobile USSD channels and daily micro-contributions to activate dormant accounts and encourage long-term savings among informal earners.