The National Pension Commission has urged states and local governments to implement the Contributory Pension Scheme for a pension-secure Nigeria.
The call was made in a statement by PenCom on Wednesday.
The Pension Reform Act (PRA) 2014, in Section 2(1), stipulates that the scheme applies to all public sector employees across Abuja, states, local governments, and the private sector.
According to the statement in the 1999 Constitution of the Federal Republic of Nigeria (as amended), state governments have the constitutional right to legislate pension matters within their jurisdictions.
The commission said state governments were required to domesticate the scheme by enacting appropriate pension laws within their states.
In August 2006, the National Council of States adopted the scheme for all states and local governments to support this adoption, PenCom developed a Model State Pension Law, enabling state governments to modify it according to their unique needs.
According to the statement, PenCom reviews draft state pension laws and guides states throughout implementation.
The commission said many states were yet to implement the scheme.
“For a state to implement the CPS in full, the state is required to enact a law on CPS, establish a Pension Bureau, register its employees with Pension Fund Administrators (PFAs) and commence remittance of pension contributions.
“The state is also required to carry out actuarial valuation, commence funding of accrued pension rights, procure group life insurance for its employees, and open and fund a retirement benefits bond redemption fund account with the Central Bank of Nigeria (CBN) or PFA,” the statement said.
The commission commends Lagos, FCT, Osun, Kaduna, Ekiti, Edo, Ondo, Delta, Benue, Anambra, and Jigawa for their exemplary implementation of the scheme as of December 2024.
According to the statement, these states have set the benchmark for sustainable pension administration by ensuring that retirees receive their entitlements promptly, consistently remitting employer and employee pension contributions under the CPS, and Jigawa remits contributions under the Contributory Defined Benefits Scheme.
The commission said some states had enacted laws to adopt the scheme but have not yet made significant strides towards implementation. The states 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 their efforts toward full implementation of the scheme by timely remitting employer and employee pension contributions.
The statement said that by taking decisive action, these states can align with the pacesetters to ensure a secure and sustainable retirement scheme for their workforce.
According to the statement, PenCom observed that Akwa Ibom, Borno, Kwara, Plateau, Cross River, and Yobe have not begun implementing the scheme.
The scheme was designed to ensure that all retirees receive their benefits in a timely manner, providing a sustainable and secure retirement for all public sector employees.
The commission said the scheme offers a long-term solution to the pension liabilities that many states currently face.
PenCom warned that failure to adopt the scheme would worsen pension debts, creating financial burdens for future administrations.
“By failing to address pension arrears, states are inadvertently creating a financial burden for future generations, as these liabilities will continue to grow,” PenCom. “Adopting the CPS now will help states avoid these escalating costs and provide a more secure financial future for both retirees and taxpayers.”
(NAN)
