PenCom urges states to implement contributory pension scheme

The National Pension Commission has urged state governments to implement the Contributory Pension Scheme to boost the welfare of retirees.

According to the pension industry regulator in an advertorial on Wednesday, only 11 states have commenced the implementation of the CPS as of December 2024.

The Pension Reform Act (PRA) of 2004 was landmark legislation that revolutionised pension administration in Nigeria by introducing the Contributory Pension Scheme. Under this law, employees and employers jointly contribute to a retirement savings account for each worker, making pensions more sustainable.

According to PenCom, only states like Lagos, Kaduna, Ekiti, Edo, Ondo, Delta, Benue, Anambra and Jigawa States, as well as the Federal Capital Territory have implemented the CPS.

“Setting the pace of sustainable pension administration, ensuring that retirees receive their entitlement promptly. The following states are yet to commence the implementation: Akwa Ibom, Borno, Kwara, Plateau, Cross River and Yobe. These states are encouraged to enact their CPS laws and commence implementation,” said PenCom.

Meanwhile, some states have enacted the law to adopt the CPS but are yet to take significant steps towards implementation.

These states include Abia, Adamawa, Bauchi, Bayelsa, Ebonyi, Enugu, Gombe, Imo, Kano, Katsina, Kebbi, Kogi, Nasarawa, Niger, Ogun, Oyo, Rivers, Sokoto, Taraba and Zamfara.

“PenCom urges them to accelerate the process and join the pacesetters. A pension-secure Nigeria is possible. We are calling on all states to help make this a reality,” the regulator stated.

Earlier this month, the governor of Yobe State, Mai Mala Buni, expressed the readiness of the state for the scheme.

Buni expressed the readiness of his administration to take action during a visit by the director-general of the National Pension Commission, Omolola Oloworaran, to the governor of Yobe State.

“The governor highlighted that the adoption of the CPS would not only provide long-term benefits but also address issues related to pension arrears and past service liabilities. He further emphasised the need for sensitisation programmes to ensure that all stakeholders understand the scheme’s benefits and operational framework,” part of a statement on the visit read.

Meanwhile, the Nigerian pension industry portfolio grew about 22.60 per cent to close December 2024 at N22.51tn from N18.36tn as of December 2023.

In the latest monthly report from the National Pension Commission, the total number of registered Retirement Savings Account holders stood at 10,582,299.