The National Pension Commission (PenCom) has warned that the Federal Government's target of investing 30% of pension assets in infrastructure may not be achieved, as 91 accounts remain unfunded. The warning was issued by PenCom's Director-General, Mrs. Aisha Dahir-Umar, during a stakeholders' forum in Abuja on Thursday.
Challenges Hindering Infrastructure Investment
Dahir-Umar attributed the potential shortfall to several challenges, including the lack of bankable projects, regulatory bottlenecks, and the reluctance of some pension fund administrators (PFAs) to invest in long-term infrastructure due to liquidity concerns. She noted that while the pension industry has grown significantly, with assets under management reaching N18 trillion as of June 2026, the infrastructure investment component remains below expectations.
The DG explained that the 30% target, set by the National Pension Commission's Investment Guidelines 2024, was intended to channel pension funds into critical sectors such as power, transportation, and housing. However, as of the end of June 2026, only about 12% of pension assets have been invested in infrastructure, leaving a significant gap.
91 Accounts Unfunded: A Growing Concern
PenCom also disclosed that 91 retirement savings accounts (RSAs) belonging to workers in the formal sector have not been funded by their employers. These unfunded accounts represent a breach of the Pension Reform Act 2014, which mandates employers to remit contributions within seven working days of the salary payment. The commission has vowed to enforce compliance, warning that defaulting employers will face sanctions, including fines and possible prosecution.
According to PenCom, the unfunded accounts are spread across various states and sectors, with the highest concentration in the manufacturing and construction industries. The commission has begun sending compliance notices to the affected employers and has given them a 30-day ultimatum to rectify the situation or face penalties.
Impact on Retirees and the Economy
The failure to meet the infrastructure investment target has broader implications for the economy, as pension funds are seen as a stable source of long-term capital for development projects. Analysts have noted that increasing pension investment in infrastructure could help bridge Nigeria's infrastructure deficit, which the World Bank estimates at about $100 billion annually. However, the current pace of investment suggests that the target will likely be missed, potentially delaying critical projects.
For retirees, the unfunded accounts mean that many workers may not receive their full pension benefits upon retirement. PenCom has assured that it is working to ensure all employers comply with the law, but acknowledged that enforcement has been challenging due to the informal nature of some businesses and the economic downturn.
Next Steps and Recommendations
PenCom has recommended a review of the investment guidelines to make infrastructure investment more attractive to PFAs, including the introduction of tax incentives and guarantees. The commission also plans to collaborate with the Ministry of Finance and the Central Bank of Nigeria to create a pipeline of bankable projects that can absorb pension capital.
In the meantime, PenCom is intensifying its compliance monitoring, using data analytics to track employer remittances. The commission has also launched a public awareness campaign to educate workers on their rights and the importance of verifying their RSA balances. The 30-day ultimatum for the 91 unfunded accounts expires in September, after which PenCom will publish the names of defaulting employers.
