Pension contributions surge 42% despite dormant accounts

Nigeria’s Personal Pension Plan recorded a sharp rise in quarterly contributions, but the increase has done little to resolve the scheme’s participation problem. Contributions reached N147.16 million in the first quarter of 2026, up 42.46% from N103.30 million in the previous quarter.

The increase added N43.86 million to cumulative contributions, which have reached N1.66 billion since the scheme began. Yet the National Pension Commission’s Q1 2026 industry report showed that 91.4% of registered accounts remained dormant.

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The 42 per cent increase in quarterly inflows demonstrates that active participants are beginning to deposit larger volumes, but the sheer volume of dormant accounts shows that initial onboarding is failing to translate into financial commitment.

Of 219,316 registrations recorded since inception, only 18,811 accounts, or 8.6%, had active Retirement Savings Account funding. The remaining 200,505 accounts had received no contributions. Ade Ojapa, a Lagos-based stock market trader and pension analyst, said the figures showed that some active participants were depositing larger amounts, while many registrations had not become regular savings.

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Unlike formal sector employees whose contributions are deducted at source by employers, informal workers must manually transfer funds while managing unpredictable daily incomes.

The challenge is particularly pronounced among informal workers, who make contributions voluntarily. A member of the Pension Fund Operators Association of Nigeria said these workers must transfer money themselves while managing unpredictable daily incomes. Inflation, the official said, often makes voluntary long-term savings the first expense households cut.

PenCom created the Micro Pension Plan to extend Nigeria’s Contributory Pension Scheme to self-employed people and other informal workers. The plan permits flexible payments and allows contributors to withdraw 40% of accumulated funds before retirement for contingent needs, while reserving the remaining 60% for retirement. With the informal sector accounting for an estimated 80% of Nigeria’s workforce, turning registrations into recurring contributions remains the scheme’s central test.

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When headline inflation squeezes household budgets, voluntary long-term savings are usually the first casualty.