States implementing CPS prospering, securing retiree’s future, says PenCom
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- Holds consultative forum for State Pension Bureaux
States that are implementing the Contributory Pension Scheme (CPS) are on the right path to a glorious future without pension liabilities, economic development and assured financial security for workers and retirees, the Acting Director-General, National Pension Commission (PenCom), Ms. Omolola Oloworaran, has said.
She spoke during the Consultative Forum for states and the Federal Capital Territory (FCT) Pension Bureaux in Lagos last week.
The Forum was part of PenCom’s efforts to facilitate the adoption and implementation of the CPS by states as provided by the Pension Reform Act 2014 (PRA 2014).
The event, which was a focal point for state-level pension administrators, brought together key stakeholders to address the growing concerns surrounding pension reforms at the sub-national level.
Ms. Oloworaran underscored the critical role of the Forum as a vital platform for fostering collaborative solutions to pension-related challenges and catalysing long-overdue reforms in state pension systems.
Since its inception in 2014, the forum has facilitated the exchange of ideas and expertise that are crucial for states to develop frameworks for CPS implementation.
Lagos commended for CPS Implementation
Specifically, PenCom DG commended the Lagos State Government for its notable strides in the implementation of the CPS, highlighting the state’s consistent remittance of pension contributions, its commitment to funding accrued pension rights, and establishment of a Group Life Insurance Policy.She stated that these efforts have positioned Lagos as a beacon of pension sustainability, serving as a model for other states.
The Head of Service, Lagos State, Mr. Bode Agoro, said the state has prioritised the welfare of its workforce and the retirees by aligning its policies with the aims of the CPS under the PRA.
Agoro, who was represented by the Permanent Secretary, Office of the Head of Service, Mrs Sunkanmi Oyegbola, assured participants that Lagos remains committed to ensuring that pension contributions are regularly remitted, and retirees receive their entitlements promptly.
Non-Compliant statesHowever, Oloworaran said beneath the commendations lies a stark reality: Nigeria’s subnational pension landscape is still marred by inadequate reforms, with many states still lagging in their adoption of the CPS.
She said of the 25 states that have passed laws to adopt the CPS, only eight have fully implemented the scheme while six other states have adopted the Contributory Defined Benefits Scheme (CDBS).
She noted that the pace of implementation has remained relatively slow as more action is required by the states to make appreciable progress.
She said the commission plans to engage with the 26 states that have either enacted CPS or CDBS laws but are yet to commence implementation.
Pension funds for development
Ms. Oloworaran also pointed out the potential of pension funds to be a force for economic development, particularly through infrastructure investments.
She cited five states: Lagos, Niger, Osun, Ekiti, and Delta — that have issued state bonds, which were subscribed with pension funds.
She said: “These bonds, in turn, have been used to finance critical infrastructure projects, such as the Lekki-Ikoyi Bridge in Lagos, noting that the CPS thus offers states a unique opportunity to access accumulated pension funds for infrastructural development.
“As of July 2024, pension fund assets under the CPS have surged to over N20 trillion, demonstrating the immense potential of these funds if properly harnessed. Since January 2020, states have remitted over N236.7 billion in pension contributions, which underscores the need for even greater compliance”, she added.
Proposed reforms
Recognising the complexities and financial burdens states face in adopting the CPS, the Acting DG encourages flexibility in a manner that suits each state.
“In this regard, PenCom proposes that states adopt the CPS for new employees or those employed for 10 years or less. The strategy would substantially reduce the burden of accrued pension rights payable upon retirement under the CPS.
“PenCom also announced that, effective December 2025, it will introduce a Recognition and Award System to acknowledge states that have made significant strides in implementing pension reforms. This initiative is intended to incentivize lagging states to follow suit, fostering healthy competition and encouraging faster CPS adoption,” she said.
She urged states that have made progress in implementing the CPS to share their experiences and best practices with states that are still in the early stages of reform, adding that collaboration is key to overcoming the pension challenges facing the nation.
“PenCom also announced that, effective December 2025, it will introduce a Recognition and Award System to acknowledge states that have made significant strides in implementing pension reforms. This initiative is intended to incentivize lagging states to follow suit, fostering healthy competition and encouraging faster CPS adoption,” she said.
She urged states that have made progress in implementing the CPS to share their experiences and best practices with states that are still in the early stages of reform, adding that collaboration is key to overcoming the pension challenges facing the nation.
https://thenationonlineng.net/states-implementing-cps-prospering-securing-retirees-future-says-pencom/
