October 12, (THEWILL) – SAM DIALA writes that PenCom’s Awabah partnership offers a new route to pension inclusion, but PFAs, custodians and fintechs must turn technology into trust, access and sustained savings for maximum results.
The National Pension Commission (PenCom) is attempting to solve one of the most stubborn weaknesses in Nigeria’s pension system: how to take retirement savings beyond the relatively small universe of formally employed Nigerians and into the millions of traders, artisans, farmers, transport workers, freelancers and small-business owners who operate largely outside conventional payroll systems.
At the commission’s 2026 annual media conference in Lagos recently, PenCom’s director-general, Ms Omolola Oloworaran, presented a catalogue of reforms and performance indicators showing a pension industry that has expanded significantly in assets, membership, compliance and investment reach.
Perhaps the most consequential element of the commission’s current strategy is less spectacular in financial terms: its decision to use technology and fintech distribution to reach workers who have historically remained outside the pension net.
The engagement of fintech company Awabah as an Accredited Pension Agent under PenCom’s Personal Pension Plan (PPP) could therefore prove more important than another increase in pension assets. It goes to the heart of the inclusion problem.
PenCom said pension assets rose from N20.79 trillion in July 2024 to N31.48 trillion by July 2026, representing an increase of more than N10.7 trillion. Over the same period, 938,229 Nigerians joined the Contributory Pension Scheme.
These are significant milestones. But they also expose the other side of the pension story. Nigeria can boast of a pension industry with more than N31 trillion in assets and still have the overwhelming majority of its working population without meaningful retirement protection.
Recent data cited by PenCom indicate that pension participation among Nigerian adults increased from 7.8 per cent in 2023 to only 9.1 percent in 2026. In other words, roughly nine out of every 10 Nigerian adults remain outside formal pension arrangements. That is the problem PenCom’s fintech strategy must confront.
Beyond the office worker
For decades, the architecture of the Contributory Pension Scheme has been easier to operate around the formal workplace. An employer deducts a contribution. The money is remitted. A Pension Fund Administrator manages the Retirement Savings Account, while a Pension Fund Custodian holds the assets. The employee receives statements and eventually accesses retirement benefits.
But that model does not naturally fit the economic reality of a woman selling food in a market, a mechanic working from a roadside workshop, a farmer whose income is seasonal, a fashion designer paid irregularly or a young digital worker earning from multiple clients.
The informal economy is different. Income is irregular. Workers move from one location to another. Many have no employer to make deductions on their behalf. Some have little understanding of pension products. Others distrust financial institutions or consider retirement savings a luxury when daily survival consumes most of their income.
PenCom itself recognises this structural problem. Its Micro Pension framework notes that informal-sector workers have dispersed locations and low or irregular incomes, requiring products and technology capable of registering contributors, collecting contributions, providing account support, paying benefits and offering financial advice. This is precisely where the Awabah initiative becomes strategically important.
The commission has already described the technology-enabled model in practical terms: a trader should be able to make a pension contribution from her phone; a mechanic should be able to contribute weekly without leaving his workshop; and a farmer should be able to monitor his pension balance digitally.
That is a fundamentally different approach from expecting millions of informal workers to walk into pension offices and understand a system designed largely around formal employment.
Why Awabah matters
PenCom formally licensed and unveiled Awabah as its first Accredited Pension Agent under the Personal Pension Plan in February 2026. The APA framework is designed to enable approved agents to market the PPP and register new contributors through the pension ecosystem.
The significance is not that Awabah is a fintech company. The significance is distribution. Nigeria does not necessarily have a pension-product problem. It has a pension-access and pension-distribution challenge.
A pension account is of limited value to a trader who cannot conveniently fund it. A sophisticated pension website is irrelevant to an artisan who does not understand the product. A good retirement investment strategy cannot protect a worker who never enters the system.
Fintech can change that equation by putting pension enrolment, contribution and account information closer to the worker. It can convert pension saving from an occasional administrative exercise into a routine digital financial behaviour. That is the real promise.
The partnership is also consistent with PenCom’s broader attempt to redesign the Personal Pension Plan and make it more suitable for people outside conventional employment. The commission has progressively developed an Accredited Pension Agent framework and related regulations to widen distribution.
The real test begins now
However, PenCom must guard against declaring victory too early. Licensing a fintech does not automatically produce financial inclusion. The critical question is whether the new distribution architecture will result in millions of active contributors who continue saving, rather than millions of registrations that become dormant accounts. This distinction is crucial.
Nigeria has seen numerous financial-inclusion initiatives produce impressive enrolment figures without necessarily generating sustained financial behaviour. Pension savings are even more difficult because the benefit is deferred for decades while the competing demands on a low-income worker are immediate.
A trader who earns N10,000 today may find it difficult to save N500 for a retirement that is 20 or 30 years away when food, school fees, rent, transport and medical bills demand attention today. Consequently, the success of PenCom’s fintech strategy must be measured not merely by the number of RSAs opened but by active contributors, contribution frequency, contribution persistence, account balances and eventual retirement adequacy. That should become a central dashboard for the programme.
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PFAs must not sit on the sidelines
This is where Pension Fund Administrators must take greater ownership. Awabah can provide the technological and distribution channel, but it cannot replace the core responsibilities of PFAs. PFAs must make their products easier to understand, cheaper to access, more responsive and better suited to irregular income.
They should work with accredited agents to develop contribution models that recognise the realities of informal workers. Weekly, daily or flexible contribution patterns may be more realistic for some categories than the conventional monthly mentality. The industry should also simplify communication. The informal worker does not need a 20-page explanation of pension regulations. He or she needs to know four things:
How do I join? How much can I contribute? Can I access my money under permitted circumstances? And what will I have when I retire?
If the industry cannot answer those questions simply, technology alone will not solve the problem. PFAs should also compete on service quality. A new contributor who encounters failed transactions, delayed confirmations, poor customer service or unexplained deductions may never make another contribution.
Custodians have a role too
The custodians should equally see this as more than a regulatory compliance exercise. As the pension ecosystem becomes increasingly digital, the integrity of transactions, reconciliation, settlement, data security and reporting becomes even more important. A digitally enabled pension system must be a trusted system.
Every contribution made through a phone must be traceable. Every naira must be properly credited. Contributors must receive timely confirmation. Errors must be resolved quickly.
The more Nigeria moves pension distribution into digital channels, the greater the responsibility for the entire industry to protect contributors against fraud, identity theft, cyberattacks and data breaches. PenCom must therefore ensure that innovation does not outrun supervision.
Trust will determine the outcome
There is another obstacle that technology cannot solve by itself: public trust. Pension inclusion will remain difficult if workers believe that saving through the system does not guarantee timely access to benefits.
This makes PenCom’s broader reforms important. The commission has reported stronger compliance enforcement, recovery of outstanding pension contributions and measures designed to improve benefit administration. It also increased monthly pension payments for more than 233,000 retirees from N8.3 billion to N11.9 billion from June 2025.
The commission disclosed that cumulative recovery of pension contributions from defaulting employers had reached N36.6 billion by July 2026.
Such interventions matter because the informal worker considering joining the pension system is watching what happens to existing contributors.
If the system demonstrates that contributions are protected, investments are prudently managed, benefits are paid promptly and complaints are resolved efficiently, confidence will grow.
From inclusion to adequacy
PenCom should nevertheless look beyond coverage.
Having a pension account is not the same as having an adequate pension.
The commission’s latest figures show impressive growth in pension assets, but inflation and the rising cost of living can erode the real value of retirement savings.
The objective must therefore be to create adequate retirement income, not merely larger industry assets.
This requires higher and more consistent contributions, better investment performance, diversified portfolios and financial education.
It also means helping informal workers understand the long-term consequences of under-saving. A 30-year-old trader who saves very little for 20 years may technically be a pension contributor but still reach retirement financially vulnerable.
PenCom should therefore require the industry to provide simple retirement projections showing contributors what different contribution levels could mean over time. That would turn pension saving from an abstract obligation into a tangible financial goal.
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
