The National Pension Commission (PenCom) has called on state governments to address outstanding pension arrears and fully implement the Contributory Pension Scheme (CPS) to prevent long-term financial instability. The Commission warned that failure to resolve pension liabilities now would place a significant economic burden on future generations.
In a statement, PenCom emphasized that the Pension Reform Act (PRA) 2014, under Section 2(1), mandates that all public sector employees—including those in federal, state, and local government—fall under the CPS. However, many states have yet to fully implement the scheme, leaving pensioners at risk of delayed or unpaid benefits.
While acknowledging that states have the constitutional authority to regulate pension matters within their jurisdictions, PenCom stressed the need for states to domesticate the CPS by enacting appropriate pension laws. The Commission recalled that in August 2006, the National Council of States formally adopted the CPS for all states and local governments, and a Model State Pension
PenCom commended states that have fully embraced the CPS, ensuring timely remittances of employer and employee pension contributions. These states include:
Lagos, Federal Capital Territory (FCT), Osun, Kaduna, Ekiti, Edo, Ondo, Delta, Benue, Anambra, and Jigawa. Jigawa State, however, operates under a Contributory Defined Benefits Scheme (CDBS).
Some states have passed laws to adopt the CPS but have not made significant progress in implementation. These include:
Abia, Adamawa, Bauchi, Bayelsa, Ebonyi, Enugu, Gombe, Imo, Kano, Katsina, Kebbi, Kogi, Nasarawa, Niger, Ogun, Oyo, Rivers, Sokoto, Taraba, and Zamfara. PenCom urged these states to accelerate full implementation to ensure financial security for retirees.
Despite repeated calls, the following states have yet to commence any CPS-related implementation:
Akwa Ibom, Borno, Kwara, Plateau, Cross River, and Yobe. PenCom strongly encouraged them to expedite the passage of CPS laws and begin implementation immediately.
PenCom highlighted that transitioning from the Defined Benefits Scheme (DBS) to the CPS is inevitable for all states. The CPS is designed to ensure that retirees receive their pensions on time, reducing financial uncertainty for both pensioners and state governments.
PenCom reaffirmed its commitment to engaging with non-compliant states, providing technical expertise and advisory support to facilitate their transition. The Commission urged all states to prioritize pension reforms, stating that a pension-secure Nigeria is only possible when all states fully embrace the CPS.
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