PenCom Seeks Exponential Growth of Pension Assets
Ebere Nwoji
Despite over N23 trillion assets, over 10 million workers who have registered for the Contributory Pension Scheme (CPS), the Director General National Pension Commission (PenCom), Ms Omolola Oloworaran, said she is yet to see the exponential growth she was looking for in the pension sector.
Oloworaran, who spoke at the maiden Leadership retreat organised by PenCom in collaboration with the Pension Fund Operators Association (PenOp ), the umbrella body of all pension fund administrators in Nigeria, noted that the pension industry was no longer growing in real terms.
Describing the type of growth currently witnessed in the industry as circular growth, the PenCom DG said the pension industry was no longer growing in real terms.”We are witnessing a concerning trend where pension fund administrators are merely transferring Retirement Savings Account (RSA) balances among themselves, with limited net new contributions or meaningful expansion into untapped segments. This is circular growth, not real growth and it must change,” she stated.
On the implication, she said, “If we remain on this trajectory, we risk managing a mature but stagnant system”. She said what the sector needed was exponential growth.“Growth that opens access to the over 77 million informal sector workers, of whom fewer than 10,000 are currently active contributors. Growth that fuels infrastructure and food security, two of Nigeria’s most urgent national priorities.”
“Growth that delivers real economic value and preserves dignity in retirement. “Globally, we have seen how pension funds have transformed national economies, financing infrastructure in Australia and South Africa,Supporting housing development in Chile,Powering green energy and technological innovation in Canada and the Netherlands.These countries achieved impact not by playing it safe, but by balancing prudence with bold, forward-looking strategies, strategies that protected savers while enabling long-term national development.We must do the same,” she insisted.
She said the Pension Reform Act placed pension managers on the responsibility of protecting and growing retirement savings, adding that it was not a passive obligation.
She said, “It is a charge to act, to take bold yet calculated decisions to evolve our investment guidelines, to deepen our financial markets, to foster innovative financial products, and above all, to bring every working Nigerian, regardless of status, into the pension system.”
She said the retreat presented an opportunity for pension managers to ask themselves the hard but necessary questions on how to redesign the pension framework to be viable and attractive to all workers, ensuring healthy returns and a living wage for retirees.
“How do we unlock infrastructure and food security financing without compromising safety and liquidity. How to deepen our markets to support alternative assets while maintaining prudence and preserving value,” she asked.
She further said the managers needed to think on how to leverage technology and data to transform the pension industry as well as how to measure success, not just in naira value but by real impact on people’s lives.
In his remarks, the Lagos State Governor, Mr Babajide Sanwo Olu who was represented by Mr Aboyomi oluyomi, said pension sector has undergone tremendous transformation.
He said Lagos state has been at the fore front of transformation, having in 2007 established the Lagos State Pension Commission and in 2009 the state government enacted the Lagos State Pension Reform law. He said it Launched its CPS in 2009 and has paid over N70.99 bn to more than 20000 retirees.
