There is an observation that has been pretty concerning lately regarding a personal finance subject for the younger generation, especially Millennials, Gen Zs and younger. And it is the subject of "Pension". It appears that a huge part of the younger generation in Nigeria who are of working age are not on any form of pension plan, and these include both the employed, underemployed and unemployed. If you take a sample of size of Nigerian youths today and ask them if they are on a pension plan, most likely more than 70% would confirm in the negative. This should be concerning for a country like Nigeria with more than 38% of her population between the ages of 20 and 49, and even a higher percentage of her population younger than 20 years.
It might interest you know that a number of this demography who are employed in Micro, Small or Medium enterprises do not have any statutory pension contribution commitments from the organizations they work for, neither are they interested in the subject themselves. For some of them they are not aware, while others are either indifferent or uninterested. For others the allure of youthfulness makes them feel "invincible", like they would never get old. Still for another group the huge belief in their future, that "I go make am" spirit, blurs the need for any form of pension planning. Of course for a hugely religious population, that does not help either, as there is so much faith that tomorrow would be better than today, therefore no need to make realistic financial plans for it.
Even for the self employed Millennials and Gen Zs, pension planning is not a focus for them, neither is it for the freelancers including those that earn in hard (foreign) currency. Not to mention the massive level of unemployment; realistically how would an unemployed person even think about pension planning?
And yet, in the end, one thing is constant: Time keeps on moving. Whether we acknowledge it or not, we all must get old some day, at least barring unforeseen demise. It is not a matter of if, but when. Imagine that you are 65 or 70 years old today, would you still be able to do your current job? Would you have the strength of mind and body to carry on the rigorous level of work that you do today? What if you have not attained the level of financial freedom that you planned or desired or wished for? How would you take care of yourself and your family at that age and beyond?
So it is important to plan for that time when one would be retired, with strength diminishing with each passing year, rather than have that time meet you off guard or unprepared.
What is the way forward?
As long as you have a job or earning some money, whether you are an employee, self employed, freelancer, business owner, daily earner, informal sector player, etc, you should consider setting up a pension plan in which monthly or periodic contributions are made. Contributions to a pension plan can either be statutory (required by law) or voluntary (of your volition), or a mix of both.
For employees, if you are not sure about your Pension plan status, you might want to check with your employer to know if it is part of your contract to have statutory monthly pension contributions made partly from your salary and from your employer's end. Just like tax, it is deducted at source before your salary gets to you. But for Micro, Small and Medium enterprises, a good number of employees under such employ might not have such benefits. If you check with your employer and it is not being done, then you might need to consider setting one up yourself, wherein you make voluntary monthly contributions no matter how small.
You can search for Pension Fund Administrators (PFAs) online and contact any good one of your choice to commence this process. It is easy and usually straightforward. Once you are registered, you can start contributing an amount monthly, and increase it as time goes on or as your income improves. Do not withdraw from it for any reason. Remember, as we have said in previous articles, if there is one thing that is very helpful in your personal finance journey, it is "systems". Setting up systems for any identified aspect will help you, because as humans, we are creatures of habit.
The Pension Fund Administrators invest your money so that it compounds over time. You can typically view your account statement online and receive periodic updates. Some PFAs include Stanbic IBTC Pension, Access ARM Pension, among others. You can view them here. The key is not which one you pick, but that you start and stay consistent.
You do not need a large amount to start either. Even small, consistent contributions matter more than occasional large ones.
For the Self Employed and Freelancers
For the Self employed, freelancers, business owners, etc, the process is similar to what we outlined above. Simply register with a Pension Fund Administrator, and choose how you want to structure or set up your contributions. It could be fully voluntary, but it should be consistent.
It is important to understand how this fits into your broader financial life, including your taxes, so consulting a tax adviser is not out of place. Usually, Pension contribution should not be tax deductible. More importantly, ensure that you do not withdraw from your voluntary contributions no matter what happens. This is money for your older years, and it requires discipline.
If you look around, you will notice a recurring pattern. Many Nigerian artists, actors, musicians, and even athletes who were once at the peak of their careers often struggle financially in old age. It is not always because they did not earn well, but often because there was no structured plan for the future. If pension contributions had been set up in their prime, many of those stories might have turned out differently. Take learnings from them and plan NOW! Do not wait any further! The higher you earn the higher your contribution should be so that you can retire well at the right time.
Setting up Systems
Before we wrap up, let us talk a little more about "systems". As we said earlier, setting up systems for any identified aspect in your personal finance journey would help you, as humans are creatures of habit. But beyond habit, systems remove the burden of decision making from you. They take away the need to constantly remember, to constantly debate within yourself whether to save or spend, and to rely on willpower which often fades with time.
A properly set up pension contribution is not something you do when you feel like it, it is something that happens whether you feel like it or not. It becomes part of your financial structure, just like rent or transportation. This is why automating your contributions is powerful. Whether through salary deductions, standing orders, or scheduled transfers from your bank account, you are essentially building a quiet discipline that works for you in the background.
Over time, this consistency compounds, not just financially, but behaviorally. You begin to see yourself as someone who plans ahead, someone who keeps commitments to their future self. And that identity matters. Because in personal finance, it is not always the person who earns the most that wins, but the person who builds the most reliable systems.
In conclusion, time keeps moving, and the only way not to be left behind is to move with it, or better still, move ahead of it. In this case, being deliberate about pension planning and your retirement in general is one way to stay ahead. This week, take 30 minutes to research and register with a PFA.
Planning your pension does not cancel out the possibility of breakthroughs, luck, or exceptional success that you wish for. It simply ensures that if those things delay or do not happen at the scale you expect, you are still covered. Before you invest in Ponzi schemes or spend on betting, pause and consider investing in your future through a pension plan.
Do not let time overtake you or catch you unprepared. Start where you are, with what you have, and build consistently. Your older self will be grateful that you did.
Wishing you all the best in your investment journey. Feel free to share this article with someone who needs it in your network.
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