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The National Pension Commission (PenCom) has called on states and local governments to implement the Contributory Pension Scheme (CPS) to ensure financial security for retirees across Nigeria.
This appeal was made in a statement issued by the commission’s management in Abuja on Wednesday.
The Pension Reform Act (PRA) 2014, Section 2(1), mandates the CPS for all public sector employees across the Federal Capital Territory (FCT), states, local governments, and the private sector. However, state governments have the constitutional authority to legislate on pension matters within their jurisdictions.
To encourage compliance, the National Council of States adopted the CPS in 2006, and PenCom developed a Model State Pension Law to guide states in modifying the scheme to suit their specific needs.
Despite these efforts, many states have yet to fully implement the CPS. For full compliance, states are required to enact CPS laws, establish a Pension Bureau, register employees with Pension Fund Administrators (PFAs), and commence pension contributions. Other necessary steps include conducting actuarial valuations, funding accrued pension rights, procuring group life insurance for employees, and opening a retirement benefits bond redemption fund account with the Central Bank of Nigeria (CBN) or a PFA.
PenCom commended Lagos, the FCT, Osun, Kaduna, Ekiti, Edo, Ondo, Delta, Benue, Anambra, and Jigawa for exemplary CPS implementation as of December 2024. These states have ensured prompt payment of retirees’ entitlements and consistent pension contributions. Jigawa operates under the Contributory Defined Benefits Scheme (CDBS).
However, states such as Abia, Adamawa, Bauchi, Bayelsa, Ebonyi, Enugu, Gombe, Imo, Kano, Katsina, Kebbi, Kogi, Nasarawa, Niger, Ogun, Oyo, Rivers, Sokoto, Taraba, and Zamfara have enacted CPS laws but have yet to make substantial progress in implementation.
Furthermore, PenCom noted that Akwa Ibom, Borno, Kwara, Plateau, Cross River, and Yobe have not commenced CPS implementation at all, urging them to expedite the enactment and execution of their pension schemes.
PenCom warned that failure to adopt the CPS would worsen pension debts and place financial strain on future administrations. The commission remains committed to engaging with non-compliant states and providing technical assistance to facilitate the transition.
