Only 7 States, FCT Implement Contributory Pension – PenCom

The National Pension Commission (PenCom) has disclosed that only seven states and the Federal Capital Territory (FCT) are fully implementing the Contributory Pension Scheme (CPS), despite the adoption of pension reform laws by 26 states across the country.

PenCom made the disclosure during the maiden edition of its bi-annual consultative session for Heads of Service of states yet to fully adopt or implement the scheme.

According to the commission, the meeting was convened to deepen pension reforms at the sub-national level and address challenges hindering full compliance with the CPS framework.

The Contributory Pension Scheme was introduced under the Pension Reform Act of 2004, which took effect on June 25, 2004, to replace the old Defined Benefits Scheme that was plagued by pension arrears, weak funding, and delays in payment of retirees’ entitlements. The law was later amended through the Pension Reform Act 2014 to strengthen regulation and expand coverage.

Under the CPS, both employers and employees are mandated to make monthly contributions into a Retirement Savings Account managed by Pension Fund Administrators. The scheme currently requires employers to contribute a minimum of 10 per cent of an employee’s monthly emoluments, while employees contribute at least eight per cent.

PenCom said the consultative session provided a platform for engagement, knowledge sharing, and collaboration aimed at strengthening implementation of the pension reforms across the states.

The Head of the Civil Service of the Federation, Didi Esther Walson-Jack, attended the event as a special guest, while PenCom Director-General, Omolola Oloworaran, stressed the need for stronger commitment by states to pension reforms.
She noted that although many states had enacted pension laws in line with the Pension Reform Act, implementation remained weak in most parts of the country.

The discussions, according to the commission, focused on practical support mechanisms, the benefits of the CPS, and ways of overcoming challenges slowing adoption at the state level.

The commission added that the initiative forms part of its broader efforts to promote a sustainable pension system nationwide and ensure that workers receive their retirement benefits promptly and efficiently.

PenCom has consistently urged state governments yet to implement the scheme to do so in order to protect workers from the uncertainties associated with unfunded pension liabilities.

The CPS is regarded as one of Nigeria’s major public sector reforms designed to ensure transparency, sustainability, and long-term financial security for retirees.