Niyi Jacobs
Nigeria’s New Pension Remittance Regime Takes Off with Strong Early Performance
The recently launched pension remittance framework under the Contributory Pension Scheme (CPS) has recorded strong initial success, with increased compliance by employers and growing enthusiasm among workers across the public and private sectors.
Rolled out by the National Pension Commission (PenCom) in Q2 2025, the new remittance structure was designed to streamline monthly pension contributions, enhance transparency, reduce delays, and expand micro-pension inclusion — especially among informal sector workers and SMEs.
According to PenCom data for the first full month of implementation in June 2025, the number of employers who successfully complied with the updated guidelines rose by 27% compared to the monthly average in Q1 2025. Contribution volume also increased by ₦14.2 billion, driven by stronger enforcement mechanisms and improved digital integration.
What Has Changed?
Under the new framework, employers are now required to remit pension contributions no later than the 7th day of each month, with real-time tracking enabled through a centralized compliance portal. The portal integrates employer schedules, employee RSA numbers, and contribution confirmation from Pension Fund Administrators (PFAs).
The process includes:
Automated flagging of delayed or partial remittances
Real-time issuance of employer compliance receipts
Mandatory cross-verification of remittances before tax filings
Integration with the Joint Tax Board (JTB) and Corporate Affairs Commission (CAC) for employer tracking
For workers, the upgraded framework ensures that monthly contributions are reflected within 24–48 hours in their Retirement Savings Accounts (RSAs), compared to previous delays that could stretch into weeks.
Informal Sector Gains Traction
PenCom’s Micro Pension Plan (MPP) also saw a boost under the new regime. Informal workers such as artisans, market traders, ride-hailing drivers, and freelancers are now able to remit contributions using USSD codes, mobile apps, and agent networks.
June 2025 saw over 45,000 new micro-pension contributors, the highest monthly sign-up since the plan’s launch in 2019. Industry players attribute this growth to collaboration between PFAs, fintech firms, and market associations, many of whom now embed pension onboarding into their digital wallets and transaction flows.
“This is a turning point for pension inclusion,” said a top PFA executive in Lagos. “We are now seeing contributions come in from gig workers and small traders who were previously invisible to the retirement safety net.”
Employers Respond to Stricter Enforcement
The new compliance regime has teeth. Under the PRA 2014 (Amended), defaulting employers now face steeper penalties, including:
Monthly interest of 2% on unpaid contributions
Public listing of chronic defaulters
Withholding of business permits and tax clearance
Legal action initiated by PenCom or affected employees
PenCom’s Employer Default Register, updated monthly and publicly accessible, has also proven to be a deterrent. The Commission confirmed that over 600 employers rectified long-outstanding pension remittances in June alone to avoid being blacklisted.
Challenges Remain
Despite the early gains, implementation hurdles persist. Some small and medium-sized enterprises (SMEs) have reported difficulties navigating the new digital compliance portal due to technical literacy gaps and poor internet access.
Similarly, employers in the public sector have requested staggered onboarding for large MDAs and parastatals with legacy data systems. PenCom is said to be providing phased onboarding and help-desk support to ensure full compliance by Q4 2025.
There is also the issue of salary remittances without corresponding pension deposits, especially in some state governments and agencies. Labour unions are closely monitoring this trend and have called for real-time audit tools and direct worker alerts via SMS.
What Analysts Are Saying
Financial analysts and pension experts have largely welcomed the new system, describing it as a critical step toward restoring trust in Nigeria’s pension system and preparing for future growth.
“This reform lays the groundwork for higher asset accumulation, improved retirement security, and deeper domestic savings,” said Bode Ogundele, a pension policy analyst. “It will also support capital market development, as PFAs now manage over ₦20 trillion in pension assets, a significant portion of which is reinvested in infrastructure and government bonds.”
Looking Ahead
With rising awareness and improved systems, PenCom is targeting 1 million new RSA enrollees and at least 200,000 additional micro-pension contributors by December 2025. The Commission is also partnering with fintech platforms and mobile networks to expand access in rural areas.
As Nigeria’s pension sector continues to evolve, the success of the new remittance framework could serve as a blueprint for other developing economies seeking to deepen pension inclusion, protect workers, and channel long-term savings into national development.
