The National Pension Commission (PenCom) has called on all states and local governments to fully implement the Contributory Pension Scheme (CPS) to ensure a secure and sustainable retirement system for public sector employees across Nigeria.
PenCom emphasized that the Pension Reform Act (PRA) 2014 mandates the CPS for all public sector employees, including those in the Federal Capital Territory (FCT), states, and local governments, as well as the private sector. However, in line with the 1999 Constitution, states have the authority to legislate on pension matters within their jurisdictions, requiring them to domesticate the CPS by enacting appropriate laws.
The commission explained that despite the adoption of the CPS by the National Council of States in 2006 and the introduction of a Model State Pension Law by PenCom to guide state governments, many states have yet to implement the scheme fully.
To achieve full implementation, states must pass a CPS law, establish a Pension Bureau, register employees with Pension Fund Administrators (PFAs), and begin remitting pension contributions. Also, they must conduct Actuarial Valuation, fund Accrued Pension Rights, procure Group Life Insurance for employees, and open a Retirement Benefits Bond Redemption Fund Account with the Central Bank of Nigeria (CBN) or a PFA.
PenCom commended Lagos, FCT, Osun, Kaduna, Ekiti, Edo, Ondo, Delta, Benue, Anambra, and Jigawa for their exemplary implementation of the CPS as of December 31, 2024. These states according to the commission have consistently remitted both employer and employee pension contributions, ensuring that retirees receive their benefits promptly. However, Jigawa State operates under the Contributory Defined Benefits Scheme (CDBS).
Meanwhile, several states, including 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 fully implement the scheme. PenCom urged these states to expedite their transition to ensure the timely remittance of pension contributions.
PenCom also raised concerns over states that have yet to commence CPS implementation, including Akwa Ibom, Borno, Kwara, Plateau, Cross River, and Yobe. The Commission called on these states to enact CPS laws and take immediate steps toward full implementation to secure the financial future of their workforce.
The Commission stressed that transitioning from the Defined Benefits Scheme (DBS) to the CPS is an inevitable step for all states. Failure to implement the scheme exacerbates pension liabilities, creating a financial burden for future generations. By adopting the CPS, states can prevent the accumulation of pension arrears, enhance fiscal discipline, and ensure that retirees receive their benefits promptly.
PenCom in a statement reaffirmed its commitment to engaging with non-compliant states, providing technical support and advisory assistance to facilitate their transition. The Commission reiterated that a pension-secure Nigeria is achievable only if all states fully embrace the CPS.
