PenCom Moves to Expand Micro Pension Scheme Beyond 200,000 Enrollees

 

The National Pension Commission (PenCom) has announced plans to redesign the Micro Pension Plan (MPP) to capture millions of Nigerians in the informal sector, as the number of registered contributors remains slightly above 200,000 despite the scheme being introduced more than five years ago.

PenCom said the revamp would make the scheme more attractive and accessible to workers in the informal economy, which accounts for over 80 percent of Nigeria’s labor force. The initiative is expected to deepen financial inclusion, strengthen social security, and provide retirement savings for millions of self-employed Nigerians, artisans, and small business operators who have traditionally been excluded from the contributory pension system.

The MPP was launched in 2019 as part of efforts to extend pension coverage to workers outside the formal wage employment structure. However, uptake has been slow, with less than 1 percent of the target market currently enrolled. Analysts attribute this to low awareness, trust issues in the financial system, and difficulties in making regular contributions.

Speaking on the development, PenCom leadership explained that the redesign would introduce more flexible features, including easier contribution channels, mobile technology integration, and innovative withdrawal options tailored to the realities of informal workers. The regulator also disclosed plans to roll out new awareness campaigns and partnerships with trade associations, cooperatives, and fintech firms to drive mass participation.

“The Micro Pension Plan is crucial to ensuring that every Nigerian, regardless of employment status, has access to retirement savings and financial security. We are committed to addressing the challenges that have slowed its progress and are working on a redesigned structure that will meet the needs of the people,” PenCom stated.

The redesign comes at a time when Nigeria is grappling with rising poverty levels and growing concerns about the vulnerability of informal sector workers. Without pensions or structured savings, millions risk old-age poverty, which could strain both families and public welfare systems. Experts say expanding the pension net to include this demographic would not only provide individual financial protection but also boost domestic savings and deepen the country’s capital market.

Economists also note that Nigeria’s pension assets, which recently crossed ₦20 trillion, remain heavily concentrated within the formal sector, covering just about 10 million workers out of an estimated workforce of over 70 million. With over 60 million Nigerians still outside the pension safety net, the informal sector represents a vast untapped market.

By redesigning the MPP, PenCom hopes to address structural gaps that have discouraged participation. Some of the proposals under consideration include reducing administrative bottlenecks, lowering entry barriers, introducing incentives such as micro-insurance packages, and deploying agent networks to collect contributions in rural and semi-urban areas.

Industry stakeholders have welcomed the move, describing it as long overdue. The Pension Operators Association of Nigeria (PenOp) emphasized that leveraging technology would be critical to the success of the redesign. With the rise of mobile money, digital wallets, and agent banking, experts believe contributions and withdrawals can become more seamless, making the scheme more appealing to low-income earners.

Financial analysts also point out that trust remains a major barrier, as many informal sector workers doubt whether their contributions will be safe in the long run. To tackle this, PenCom is expected to adopt stronger transparency measures, frequent reporting, and education campaigns to build confidence. Collaboration with unions, trade groups, and religious organizations may also help drive acceptance by providing a trusted interface between workers and pension administrators.

The government’s renewed focus on the Micro Pension Plan also ties into broader efforts to strengthen Nigeria’s social protection systems. With rising concerns about unemployment, underemployment, and inflation eroding incomes, the ability of workers to plan for retirement is increasingly under threat. Expanding the pension scheme to informal workers is therefore seen as a strategic intervention to promote inclusive growth and financial resilience.

Observers argue that a well-functioning MPP could also have multiplier effects on the economy. Increased pension contributions would expand the pool of long-term funds available for infrastructure investment and private sector growth. At the same time, improved financial security could reduce pressure on government social welfare spending in the long term.

PenCom’s redesign plans are expected to be unveiled in phases, beginning with pilot programs in select states before a nationwide rollout. The Commission has pledged to work closely with pension fund administrators (PFAs), fintech firms, and regulators in the financial services ecosystem to ensure the reforms are both practical and sustainable.

As the scheme evolves, many will be watching closely to see how effectively it addresses past shortcomings and whether it can deliver on its promise of extending retirement security to millions of Nigerians. For now, the redesign signals a renewed commitment by PenCom to bridge the pension gap and create a system that reflects the realities of Nigeria’s labor market.

If successful, the revamped Micro Pension Plan could become one of the most impactful social security reforms in Nigeria’s recent history, transforming the lives of informal sector workers and contributing significantly to economic stability.