KEY POINTS

• PenCom has urged small business owners to remit workers’ pension contributions as required by law.
• The commission advised self-employed Nigerians to save for retirement instead of relying entirely on their businesses or families.
• The Personal Pension Plan provides a retirement savings option for eligible self-employed people and informal sector workers.
• PenCom also urged SMEs to keep proper financial records, separate personal and business finances, and reinvest part of their profits.

MAIN STORY

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

Samuel Uwandu, PenCom’s commissioner for inspectorate, gave the advice on Tuesday during 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, scheduled to run from October 26 to 30.

Uwandu said employers must remit pension contributions deducted from workers’ salaries on time, describing compliance as both a legal obligation and a responsibility to the people whose work supports their businesses.

He warned that delayed or unpaid contributions could weaken workers’ financial security in retirement and reduce confidence in the pension system.

The commissioner said employees contributed more than labour to an enterprise, bringing skills, knowledge and commitment that helped businesses grow. He urged employers to recognise this by paying salaries when due, providing safe working conditions and meeting their pension obligations.

Beyond their responsibilities to employees, Uwandu urged entrepreneurs to make retirement planning part of their financial decisions while they were still earning.

He said many business owners spent their most productive years building their enterprises, reinvesting profits and supporting their families without making adequate provision for their own retirement.

According to him, business income cannot be guaranteed indefinitely, as age, illness and economic difficulties may eventually limit an entrepreneur’s ability to work.

He advised business owners to develop a savings habit, keep retirement funds separate from the money used to run their businesses and consider suitable long-term savings arrangements.

Uwandu identified the Personal Pension Plan (PPP) as an option under Nigeria’s contributory pension framework for eligible self-employed people and informal sector workers. He encouraged them to seek guidance from licensed pension fund administrators and PenCom on the arrangements available to them.

The commissioner also urged SMEs to improve their financial management by maintaining proper records, separating personal and business accounts, monitoring income and expenditure, and reinvesting a reasonable share of profits.

He said reinvestment could help businesses purchase equipment, adopt better technology, increase stock, train employees and reach new customers through advertising. However, he cautioned against neglecting personal financial needs in the pursuit of business growth.

Uwandu called on the government to create a supportive environment for SMEs, noting their contributions to employment, skills development and local production. He also encouraged participants to share experiences and identify practical ways to improve business performance and workers’ welfare.

THE ISSUES

For small business owners, pension planning involves two separate responsibilities: protecting employees’ retirement savings and building a financial cushion for their own later years.

When employers deduct pension contributions but fail to remit them, workers may lose the benefit of savings intended to support them after they stop working. Compliance therefore affects employees’ future financial security, not just an employer’s relationship with regulators.

Entrepreneurs also face a different risk. A business may provide a living for years but become less profitable or harder to operate as its owner grows older. Without separate retirement savings, the owner may have to continue working out of necessity or depend on relatives.

The challenge is balancing immediate business needs with long-term financial security. Money reserved for retirement cannot simply be treated as working capital, while excessive reinvestment without personal savings may leave an entrepreneur financially exposed later in life.

WHAT’S BEING SAID

• “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.” – Samuel Uwandu, PenCom commissioner for inspectorate.
• “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.” – Samuel Uwandu.
• “Employees are not simply a cost of doing business. They are partners in building the enterprise.” – Samuel Uwandu.
• “As your business grows, you should also begin to prepare for your financial future and retirement.” – Samuel Uwandu.

WHAT’S NEXT

The engagement forms part of the 2026 National Pension Week, which runs until October 30. Business owners who want to explore retirement savings options can contact PenCom or a licensed pension fund administrator to establish which arrangements apply to them.

SMEs also need to review their payroll and pension processes to ensure contributions deducted from employees’ salaries are remitted as required. For entrepreneurs, the practical next step is to assess how much they can set aside regularly for retirement without undermining the cash needed to operate their businesses.

BOTTOM LINE

PenCom’s message to SMEs is that building a successful business should not come at the expense of workers’ retirement security or the owner’s financial future. Timely pension remittances and separate retirement savings can help protect both.

Source: Premium Times