Nearly N30 billion in pension contributions is currently stuck with Pension Fund Administrators (PFAs) instead of reaching employees’ accounts. The National Pension Commission (PenCom) attributes this N29.84 billion backlog to employer errors, such as inconsistent data and irregular schedules, which prevent the transfer of funds to individual Retirement Savings Accounts (RSA).
Stanbic IBTC accounts for nearly half of the uncredited total (N14.60 billion), followed by PAL Pensions at N2.76 billion, Trustfund Pensions with N2.09 billion, Premium Pension at N1.72 billion, and Access ARM Pensions at N1.67 billion.
Together, these five PFAs account for a dominant share of the total uncredited balance, reflecting both their scale and the structural challenge that still hounds the management of the Contributory Pension Scheme (CPS), particularly poor remittances by private sector employers.
‘The heavy concentration, particularly the outsized exposure of Stanbic IBTC Pensions, points to systemic issues rather than isolated operational lapses. It highlights inefficiency in the CPS, where gaps in remittance processes, data integrity, and enforcement continue to hinder the timely crediting of pension contributions to workers RSA, says Chika Onwunali, partner at Premium Debate.
According to Onwunali, their extensive RSA base naturally increases exposure to reconciliation issues, while their concentration of large corporate clients introduces complexity in processing high-volume, multi-employee remittances.
‘Moreover, older PFAs tend to carry a backlog of unresolved legacy contributions, further inflating their uncredited balances’.
Onwunali said the inability to fully enforce pension remittance in the private sector will continue to undermine the efficiency of the CPS.
‘A major cause of the problem is employer remittance failure. In many cases, employers deduct pension contributions from employees’ salaries but delay or fail to remit them altogether. Even when remittances are made, they are often submitted without the required schedules, making reconciliation difficult for PFAs, according to Abimbola Ogundipe, who works with one of the PFAs
‘This is compounded by widespread data mismatch issues, including incorrect RSA PINs, incomplete employee details, and inconsistencies in names, problems that are particularly prevalent among legacy accounts opened before June 2019, she said.
‘Another significant factor is the practice of bulk payments without proper breakdowns. Contributions are sometimes transferred as lump sums without employee level attribution, leaving PFAs unable to allocate funds accurately, she said.
Analysts at the Pension Fund Operators Association of Nigeria (PenOp), while canvassing for data recapture exercise for RSA holders observed that some contributors in the early part of the CPS had multiple RSAs.
‘Others had incomplete biodata, for example, incorrect dates of birth, inconsistent names, missing fingerprints, or outdated employer records. In many cases, contributors changed jobs without properly updating their records’.
These discrepancies may appear minor during active employment, but at retirement, when benefits are to be processed, even a small data mismatch can delay access to funds, the analysts said.
PenOp observed that data recapture initiatives were therefore introduced to clean, update, harmonise, and verify contributor records across the industry. The goal is simple: to ensure that every RSA holder can access their pension seamlessly when the time comes.
Addressing these challenges, experts say it will require a combination of technological upgrades, stricter enforcement, and industry-wide reforms. Real-time remittance matching should be prioritised, with automated validation systems ensuring that contributions cannot be processed without accurate RSA details.
Stronger penalties for non-compliant employers, including public disclosure, could serve as an effective deterrent.
Meanwhile, PenCom recently took a significant step towards modernising Nigeria’s pension system with the launch of the Pension Contribution Remittance System (PCRS). This innovative platform replaces the manual process of remitting pension contributions by allowing employers to upload their employees’ pension schedules and make payments online.
According to Omolola Oloworaran, director general of PenCom, the PCRS aims to eliminate paperwork, reduce errors, increase transparency in pension remittances, and resolve long-standing issues related to uncredited pension contributions and verification delays.
To achieve this, PenCom has approved nine Payment Solution Service Providers (PSSPs) to facilitate seamless pension payments for employers. These PSSPs will validate employees’ Personal Identification Numbers (PINs) and Pension Fund Administrators (PFAs) with PenCom’s database, before processing payments.