Nigeria considers pension reforms to protect retirees and expand coverage

Proposals have emerged in Nigeria to implement Retirement Vulnerability Checks to protect retirees from financial exploitation and unsustainable spending. Under the current Contributory Pension Scheme (CPS) administered by the National Pension Commission (PenCom), retirees receive lump-sum payments that may be at risk due to cognitive decline, poor financial literacy, or undue influence from third parties. Advocates suggest that Pension Fund Administrators (PFAs) should assess a client's risk of financial harm before releasing large sums, a practice already utilized by the Financial Conduct Authority in the United Kingdom.

Simultaneously, there is a push to expand pension coverage through the Personal Pension Plan (PPP). While formal sector workers are covered by the CPS, a vast majority of Nigerians in the informal economy—including traders, farmers, and artisans—lack a retirement safety net. The PPP allows existing Retirement Savings Account (RSA) holders to make voluntary contributions and provides a pathway for self-employed individuals to join the pension ecosystem. Increasing participation in these schemes aims to reduce old-age poverty and expand the nation's long-term investment capital.