New Personal Pension Plan Democratises Voluntary Contributions – PenCom

The National Pension Commission (PenCom) has announced that its newly introduced Personal Pension Plan (PPP) will revolutionise Nigeria’s pension landscape by democratising voluntary retirement savings and expanding access to self-employed individuals, freelancers, and informal sector workers. The Commission stated that the initiative is designed to give every Nigerian the opportunity to build a secure financial future, regardless of their employment type.

In a recent statement, PenCom explained that the Personal Pension Plan marks a major step toward inclusive financial security, aligning with the government’s broader vision to deepen pension penetration across the country. The plan allows Nigerians outside the formal employment sector to open and maintain individual retirement savings accounts, make flexible contributions, and enjoy the same benefits as formal sector workers under the Contributory Pension Scheme (CPS).

PenCom’s Director-General, Mrs. Aisha Dahir-Umar, described the initiative as a game-changer in the Commission’s ongoing efforts to extend pension coverage to the self-employed and informal sector participants. “The Personal Pension Plan is a testament to our commitment to ensuring that every Nigerian, irrespective of their occupation, can secure a dignified retirement. This plan provides flexibility, convenience, and inclusivity,” she said.

Dahir-Umar noted that the PPP would significantly boost national savings, enhance financial inclusion, and strengthen social protection systems. By enabling more Nigerians to voluntarily contribute toward their future, the plan also addresses the long-standing challenge of inadequate retirement coverage among informal sector workers, who make up over 80 percent of the country’s workforce.

Under the new scheme, individuals can determine their contribution frequency and amount, whether daily, weekly, monthly, or as income is earned. Contributions can be made through banks, mobile money platforms, and digital payment channels. The PPP also provides contributors with access to investment returns, account statements, and withdrawal options in line with regulatory guidelines.

PenCom explained that the plan was built with flexibility and technology at its core to make participation seamless. Contributors can monitor their pension accounts online, track performance, and even make contributions through automated systems. This user-friendly approach, according to the Commission, ensures that artisans, traders, professionals, and gig economy workers can participate without bureaucratic hurdles.

The Director-General further emphasised that PenCom’s introduction of the PPP was informed by the success of the Micro Pension Plan (MPP), launched in 2019 to cater to informal workers. However, the PPP takes inclusivity a step further by offering additional features and incentives tailored to the realities of self-employed individuals and digital entrepreneurs.

“This is an evolution of our pension reform agenda. The PPP bridges the gap between traditional employment-based pensions and the dynamic, flexible nature of modern work. Whether you are a small business owner, consultant, or digital freelancer, you now have a pathway to retirement security,” Dahir-Umar added.

She disclosed that PenCom had also strengthened regulatory oversight and collaboration with Pension Fund Administrators (PFAs) to ensure that the process of enrollment and fund management remains transparent, efficient, and secure. The Commission is working with PFAs to roll out public education campaigns that will raise awareness about the benefits and operations of the new pension product.

According to industry experts, the introduction of the PPP could attract millions of new contributors into Nigeria’s pension system, potentially raising total pension assets, which already stand above ₦20 trillion. This growth could further deepen domestic capital markets by increasing the pool of long-term funds available for national development projects.

Financial analysts have commended PenCom’s proactive approach, describing the PPP as a critical tool for addressing retirement insecurity. They noted that in a country where most people rely on family support or informal savings in old age, the new plan offers a sustainable and reliable alternative.

A Lagos-based financial consultant, Mr. Tunde Aluko, stated that “the Personal Pension Plan reflects the reality of today’s economy, where many people earn outside the traditional employment structure. It gives freelancers, entrepreneurs, and artisans a chance to plan their retirement on their own terms while enjoying the safety and professionalism of the regulated pension system.”

He added that with rising inflation and economic uncertainty, the need for structured savings has never been greater. “The PPP provides a disciplined savings mechanism that can ensure people have a steady income when they retire, rather than relying solely on unstable investments or family assistance,” Aluko noted.

PenCom also assured Nigerians that the new plan comes with robust safeguards and transparent investment strategies to protect contributors’ funds. The Commission said it will continue to monitor PFAs to ensure strict compliance with investment guidelines and customer service standards.

To enhance accessibility, PenCom is partnering with digital platforms and mobile network operators to simplify the onboarding process, allowing contributors to register remotely and manage their accounts easily. The Commission is also exploring collaborations with market associations, cooperatives, and professional unions to promote mass participation.

As Nigeria continues to expand its pension coverage, the PPP is seen as a major leap toward achieving universal social security. By removing structural barriers and introducing flexibility, PenCom is making pension savings more relevant and attractive to the modern workforce.

 

Ultimately, the Personal Pension Plan represents a significant milestone in Nigeria’s ongoing pension reform journey. It not only promotes a culture of voluntary savings but also ensures that millions of self-employed and informal workers—previously excluded from retirement benefits—can now look forward to a financially secure future.