PenCom Pushes for Full Implementation of Pension Reform Nationwide

The National Pension Commission (PenCom) has called on State governments to fully implement the Contributory Pension Scheme (CPS), warning that failure to do so will deepen pension liabilities and put retirees at risk of financial hardship.

The Pension Reform Act (PRA) 2014 has made CPS mandatory for all public sector employees, but many States have either failed to adopt the scheme or have been slow in implementing it. Under the 1999 Constitution, States must enact their own pension laws to domesticate the scheme, but PenCom stated that progress has been sluggish in several regions.
PenCom developed a Model State Pension Law to aid the transition, which States can modify to suit their needs. It also provides technical support, reviews draft pension laws, and guides implementation. However, many States have yet to fully adopt the scheme, leaving thousands of workers uncertain about their retirement benefits.
PenCom commended States such as Lagos, Kaduna, Ekiti, Edo, Ondo, Delta, Benue, Anambra, and the Federal Capital Territory (FCT) for fully implementing the CPS as of December 31, 2024. These States have consistently remitted both employer and employee contributions, ensuring prompt pension payments. Jigawa, while not under the CPS, operates a Contributory Defined Benefits Scheme (CDBS).
However, other 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 them. PenCom urged them to accelerate their efforts by remitting pension contributions and meeting other requirements.
Even, Akwa Ibom, Borno, Kwara, Plateau, Cross River, and Yobe have not commenced any form of CPS implementation, exposing their retirees to pension uncertainties.
The CPS was introduced to replace the old Defined Benefits Scheme (DBS), which left many retirees struggling with unpaid pensions due to growing government liabilities. By fully transitioning to the CPS, states can prevent pension arrears, ensure fiscal discipline, and secure timely retirement benefits for their employees.
PenCom warned that failure to adopt the CPS will worsen pension debts, creating financial burdens for future administrations. The commission reaffirmed its commitment to engaging with non-compliant states, offering technical assistance to aid their transition.
With pension security at stake, PenCom called on all states to act decisively to protect their workers’ financial futures, noting that a sustainable and secure pension system is critical for economic stability.