PenCom clarifies 38% decline in pension remittances, cites one-off government payments

The National Pension Commission (PenCom) has clarified that the 38% decline in pension contributions recorded in the first quarter of 2026 was largely due to exceptional Federal Government remittances made in the preceding quarter.

According to PenCom’s Nigerian Pension Industry Quarterly Report, total pension contributions fell to N559.42 billion in Q1 2026 from N903.70 billion recorded in Q4 2025.

However, the Commission said the Q4 figure was significantly boosted by one-off government payments that distorted quarter-on-quarter comparisons.

What they are saying

In a clarification note sent to Nairametrics, PenCom explained that Q4 2025 pension contributions included N499.15 billion in extraordinary inflows from the Federal Government.

• “Total pension contributions amounted to N559.42 billion in Q1 2026, with the public sector contributing 50.9% and the private sector 49.1%. On the surface, this represents a 38.1% decline from the N903.70 billion recorded in Q4 2025. However, this comparison is affected by significant one-off Federal Government remittances recorded during Q4 2025,” the Commission stated.

According to PenCom, the exceptional inflows comprised:

• N379.96 billion for pension increases arising from the 15%, 33%, and consequential adjustments implemented in 2007, 2010, 2019, and 2024
• N107.72 billion for the settlement of the 2.5% shortfall in employer pension contributions covering April 2017 to December 2021; and
• N11.47 billion in accrued rights credited into the Retirement Savings Accounts (RSAs) of eligible staff of Treasury-Funded Agencies.

Underlying contributions rose 38.2%

PenCom noted that after excluding the exceptional inflows, underlying pension contributions in Q4 2025 amounted to N404.55 billion.

Using this adjusted figure, the N559.42 billion recorded in Q1 2026 represents an increase of N154.87 billion, translating to a quarter-on-quarter growth of 38.2%.

• “Accordingly, while headline figures suggest a decline in contributions relative to Q4 2025, an adjusted analysis indicates that pension contributions recorded robust growth in Q1 2026, driven by stronger underlying contribution inflows rather than one-off government-funded remittances,” the Commission said.

The clarification suggests that pension remittance performance remained strong during the first quarter despite the apparent decline in headline figures.

Get up to speed

The clarification follows an earlier Nairametrics report highlighting the sharp drop in pension contributions during the quarter.

• At the time, PenCom had described the contribution level as healthy but did not provide detailed reasons for the decline.
• The Commission also disclosed that it recovered N1.18 billion from 15 defaulting employers during Q1 2026.
• The amount comprised N450 million in outstanding pension contributions and N729 million in penalties.

PenCom further revealed that it had intensified compliance enforcement by engaging the Independent Corrupt Practices and Other Related Offences Commission (ICPC) on unresolved cases, with six employers already interrogated.

What you should know

The latest clarification comes amid ongoing consultations on proposed amendments to the Pension Reform Act (PRA) 2014.

• As part of the review, PenCom is advocating an increase in the statutory pension contribution rate for employers.
• Under the current Contributory Pension Scheme, employers contribute a minimum of 10% of an employee’s monthly emoluments, while employees contribute 8%, bringing the total mandatory contribution to 18%.

However, the proposal has faced opposition from the Organised Private Sector of Nigeria (OPSN), which argues that raising employer contributions could increase operating costs for businesses already grappling with economic pressures.