PenCom urges SMEs to remit workers’ pensions, plan for retirement

The National Pension Commission (PenCom) has urged small business owners to remit workers’ pension contributions as required by law and make retirement planning a priority rather than depend solely on their businesses for income in old age.

Samuel Uwandu, PenCom’s commissioner for inspectorate, gave the advice on Tuesday at an engagement with small and medium-sized enterprises (SMEs) and informal sector operators in Lagos, on the second day of the 2026 National Pension Week.

The 2026 National Pension Week is scheduled to run from 26 to 30 October planning and encouraging wider participation in Nigeria’s pension system.

At the event, Mr Uwandu said timely remittance of pension contributions was both a legal obligation and a responsibility employers owed workers whose efforts contributed to the success of their businesses.

“Pension contributions deducted from employees’ salaries must be treated with the seriousness they deserve and remitted in accordance with the laws of the Federal Government of Nigeria,” he said.

He warned that delayed or unremitted contributions could undermine workers’ retirement security and weaken public confidence in the pension system.

“Compliance with pension obligations is not merely a regulatory requirement; it is an expectation and responsibility of business leadership, and respect for the people who help make the business succeed,” he said.

The commissioner said employees’ knowledge, skills and commitment were essential to business growth, adding that employers should recognise their contributions by meeting their statutory obligations, paying salaries when due and providing safe working conditions.

“Employees are not simply a cost of doing business. They are partners in building the enterprise,” he said.

Plan for retirement

Mr Uwandu also urged entrepreneurs to prepare financially for retirement instead of assuming their businesses would continue generating income indefinitely.

He said many business owners devoted their most productive years to building their enterprises, reinvesting earnings and supporting their families but paid little attention to their own retirement.

According to him, business owners should consider how they would sustain themselves when age, illness, economic difficulties or other circumstances made it difficult to continue working.

“As your business grows, you should also begin to prepare for your financial future and retirement,” he said.

He advised entrepreneurs to cultivate a savings culture, set aside retirement funds separately from their business working capital and explore appropriate long-term savings arrangements.

Mr Uwandu said the Personal Pension Plan (PPP) under Nigeria’s contributory pension framework provides a retirement savings option for eligible self-employed Nigerians and people working in the informal sector.

He urged business owners to seek guidance from licensed pension fund administrators and PenCom on the arrangements applicable to them.

“The central message here is simple: retirement planning should not begin only when a person is approaching retirement age.

“It should be gained when there is still time to save money, contribute, benefit from long-term accumulation, and build financial resilience,” he said.

He added that entrepreneurs should aim to retire with dignity rather than remain entirely dependent on their businesses or financial support from their families.

Prioritising sustainable growth

Beyond pension compliance, Mr Uwandu urged small business owners to strengthen their financial management practices to improve the sustainability of their enterprises.

He advised them to maintain proper financial records, separate personal finances from business accounts, manage income and expenditure responsibly, and reinvest a reasonable portion of their profits into their businesses.

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He said reinvestment could help business owners acquire better equipment, improve technology, expand inventory, train employees and reach new markets through advertising.

“Where profits are consumed entirely by immediate personal needs, the business may struggle to expand or withstand unexpected challenges,” he said.

However, he stressed the need to balance reinvestment with personal financial needs, noting that sustainable businesses should support both growth and the long-term security of their owners.

Mr Uwandu also called on the government to provide an enabling environment for businesses, noting that SMEs contribute to employment, skills development, local production and economic activities across communities.

He encouraged participants to use the engagement to share experiences, identify practical solutions and commit to actions that would improve the prospects of Nigerian businesses and the welfare of their employees.