N30trn pension industry pivots to income, health access

Nigeria’s pension industry with total assets standing at about N30 trillion at the end of March 2026 is embracing a new phase of reform that prioritises income adequacy, healthcare access and broader inclusion.  

Speaking at the BusinessDay 2026 Pension Conference in Lagos, Omolola Oloworaran, director-general, National Pension Commission(PenCom), in her keynote address, explained that the next phase of reforms will move beyond the accumulation of pension assets to delivering real outcomes for retirees, particularly in a high-inflation and uncertain economic environment.

“What brought us here will not take us to where we want to be. The next phase of reform must go beyond building balances. We must focus on building outcomes,  like inclusion, dignity, and real financial security in retirement,” she said.

Nigeria’s pension industry has expanded significantly since the 2004 reform, with assets rising from about N2 trillion pension deficit to about N30 trillion, highlighting one of the country’s most successful policy transitions.

Oloworaran observed that while growth in assets masks deeper structural gaps, PenCom has seen the need to address emerging challenges.

“Many Nigerians today will retire without enough income, and even worse, many will retire without access to healthcare,” she said, noting that the regulator is advancing a Minimum Pension Guarantee and sustainable healthcare access for retirees.

“A pension that cannot sustain basic living and cannot provide healthcare needs is not security,” she added.

The reform push, captured in “Pension Revolution 2.0,” comes amid inflationary pressures, currency volatility, and global market uncertainty, which threaten the real value of retirement savings.

Oloworaran said PenCom is pushing for a shift in investment strategy, including increased allocation to infrastructure and alternative assets, alongside stronger risk management frameworks.

“We must move from passive allocation of capital to active strategic investment, from short-term thinking to long-term value preservation,” Oloworaran said.

Industry operators say these reforms are critical as the pension system seeks to play a larger role in national development while maintaining trust.

Oloworaran described this as the biggest gap in the system, noting that reforms are targeting expansion through a redesigned Personal Pension Plan (PPP) aimed at scaling participation among informal workers.

“Our mission is simple, to bring millions into the scheme and to ensure that every informal sector worker has access to not just savings, but income protection and healthcare in retirement,” she said.

Donald Onuoha, president of the Pension Fund Operators Association of Nigeria (PenOp), in his goodwill message, noted that the industry has made significant progress in supporting long-term savings and economic resilience, but must deepen collaboration to sustain growth.

“At PenOp, we believe that through sustained collaboration and constructive engagement, the pension industry can continue to contribute significantly to national development and financial inclusion,” he said.

Mohammad K Ahmad, pioneer director general of PenCom, who presented the lead paper at the conference, said the scale of assets under management now requires stronger capital buffers, improved governance, and more sophisticated investment strategies.

“Any entity that is managing this level of assets should have sufficient capital. You need capital to deploy technology, to have the best talent, and to build a resilient operational standard,” he said.

Ahmad also highlighted concentration risks within the industry, noting that a small number of pension fund administrators manage a significant share of total assets, underscoring the need for recapitalisation and stronger oversight.

Nigeria’s pension fund managers, however, face renewed pressure to protect the value of retirement savings following a fresh uptick in inflation, raising concerns about the industry’s ability to preserve real returns.

For millions of contributors, this means pension savings may once again struggle to keep pace with the rising cost of living, increasing the risk that the real value of retirement funds could erode despite steady contributions.

“The traditional sort of static benchmarks is not going to deliver the kind of returns that you expect,” said Abimbola Sulaiman, the acting CEO, AccessARM pensions, speaking at a BusinessDay pension conference, explaining that pension fund managers are now operating in a more volatile environment.

“You are now having to adapt to significantly higher inflation expectations,” she added

The latest uptick comes against a broader shift in the global investment environment since the 2008 financial crisis, when inflation and market volatility became more pronounced, forcing pension funds worldwide to move away from static investment strategies.

Industry participants say the return of inflation in recent years, both globally and in Nigeria has made it harder for pension funds to rely on traditional asset allocations, increasing the need for more dynamic and diversified investment approaches.

This reflects a growing concern across the industry that even as pension assets expand, recent price pressures are beginning to test the sustainability of returns.

Data from the National Bureau of Statistics shows headline inflation rose to 15.38 percent in March from 15.06 percent in February, marking the first increase after months of decline and signalling a renewed build-up in price pressures.

But industry experts say the key question is no longer how much the industry has grown, but whether those savings are retaining value in real terms.

 “The focus is no longer just on generating returns, but on preserving purchasing power,” Sulaiman added.

In response, fund managers are gradually shifting toward more dynamic investment strategies, including increased exposure to private markets such as infrastructure, real estate and private equity in search of higher and more resilient returns.

Despite the size of pension assets, industry players say the challenge lies not in the availability of capital, but in the shortage of bankable assets that can deliver stable, inflation-beating returns.

“There is no shortage of capital,” Sulaiman said. “The real constraint is the supply of investable opportunities with predictable cash flows and strong governance.”

As a result, pension funds continue to favour lower-risk instruments such as infrastructure debt and mature, income-generating assets, while avoiding early-stage projects that carry higher uncertainty, a cautious approach that may limit their ability to fully hedge against inflation.

Analysts say broader international diversification could help cushion portfolios by providing access to foreign currency earnings and global growth sectors.

The combined effect is a tightening investment environment, where pension fund managers must navigate renewed inflation pressures, constrained asset supply and currency risks, all while maintaining their core mandate of safeguarding contributors’ savings.

The low trust syndrome and weak participation, particularly among informal sector workers, continue to limit expansion despite ongoing reforms and rising asset levels.

But experts believe that new initiatives such as foreign currency contributions and the PPP are expected to deepen inclusion and unlock fresh inflows into the system.

“Growth without trust will fail,” Nkuma Alfred, head of safekeeping and corporate action at Zenith Pensions Custodian Limited said, who spoke as a panellist at the event. He noted that confidence remains central to attracting contributors outside the formal workforce.

 “Ultimately, contributors trust the system not because of regulation but because they are sure that the assets are safe,” Nkuma said, stressing that transparency, governance, and strong custody structures are key to building confidence.

“There are decisions that contributors need to make but if they are not aware, there is no way they can take those decisions,” Nkuma said, pointing to low awareness around fund options and contribution flexibility.

Anthonia Ifeanyi-Okoro, chief executive officer of PenOp, speaking also as panellist said the industry already has the necessary governance structures, but must now focus on expanding awareness and access.

“It’s really about selling that message, and it’s really about scale,” she said. “We have the infrastructure, but we are a young industry. We need to do more of what we have and ensure people understand what the pension system offers.”

A key challenge, Ifeanyi-Okoro noted, is that many Nigerians particularly in the informal sector do not understand either how pensions work or remain influenced by past failures under the old defined benefit system.

The result is a persistent knowledge gap that continues to limit participation, with many contributors unaware of how to optimise their savings or access benefits.

Yemisi Obitayo, vice president for business growth, operations, and partnership management at Awabah Nigeria, said many informal sector workers remain excluded simply because they do not understand the system.

“The system that you don’t know, you cannot trust,” she said, noting that targeted sensitisation efforts within trade groups, market associations, and local communities are helping to bridge the gap.

Leveraging trusted networks and community structures will be key to onboarding workers who are not mandated to participate in the scheme.

At the same time, technology is emerging as a major enabler of both trust and participation.

Digital platforms are simplifying onboarding, improving transparency, and giving contributors real-time visibility into their savings factors seen as essential in building confidence.

“When you introduce technology, you introduce efficiency; you introduce accountability and accuracy,” Nkuma said, adding that seamless contribution and reporting systems can strengthen trust in the system.

Beyond access, stakeholders emphasise that trust will ultimately be built on consistent service delivery and user experience, not just regulation.

For the industry, expanding participation among informal sector workers could significantly boost pension assets while strengthening financial inclusion and long-term savings.

But without trust, stakeholders warn, even well-designed reforms may struggle to deliver results.

“We need to be more proactive in communication,” Nkuma said. “If contributors understand how their funds grow, how they are protected, and how they can access them, confidence will increase and participation will follow.”

As reforms continue, the industry’s ability to close its trust gap may determine whether it can transition from a growing savings pool into a truly inclusive system that supports long-term economic stability.