PenCom to leverage “tools” to “force” states to comply with pension laws

The Director-General of the National Pension Commission (PenCom), Omolola Oloworaran, has disclosed that the agency plans to deploy “tools” to enforce pension compliance at the state level. She made this known during a press interview on Thursday on the sidelines of the maiden edition of the bi-annual consultative session for Heads of Service (HoS) of states that are yet to adopt or fully implement the Contributory Pension Scheme or the Contributory Defined Benefits Scheme by PenCom. What they said Asked to confirm whether PenCom would attach sanctions to states that have not complied with relevant pension laws, Oloworaran responded that while the Commission “cannot sanction” defaulting states, it will continue to explore moral pathways to encourage their participation. • “I think in the next one or two years, we’ll continue to engage and see what we achieve,” she said. However, she stressed that the Commission has “tools” to enforce compliance and would most likely use them. • “But in the longer term, we are looking for tools we can use at the Commission; maybe that will prompt the states to do the right thing. • “We can’t sanction them, but there are tools at our disposal that we can leverage to force their hands to do the right thing,” she said. She stressed that the Commission wants to ensure that affected states move from policy to implementation, essentially transitioning from legislation to execution. • “But you know, these things appear easy, but they have their own challenges as well,” she added. She also promised to continue working with state Heads of Service to navigate those challenges and ensure that the laws they pass are fully implemented soon. On her part, Walson-Jack told the press that PenCom is the relevant authority driving the implementation of pension laws. According to her, PenCom has the technical know-how to support sub-national governments in implementing these laws, which are critical to the welfare of civil servants. She appreciated PenCom for adopting a whole-of-government approach to ensure that the benefits enjoyed by civil servants at the federal level trickle down to the states. She commended PenCom and urged states to ensure pension compliance for the benefit of civil servants. More insights At the engagement, the DG disclosed that only seven states and the Federal Capital Territory are fully implementing pension reform laws. She added that 30 states and the FCT had enacted laws on the Contributory Pension Scheme or the Contributory Defined Benefits Scheme, but pointed out that six states still have pension reform legislation awaiting passage in their state assemblies. She further explained that 23 states have pension laws that are either inactive or only partially implemented. • “That leaves 23 states whose laws are written, inactive, or only partially implemented — 23 sets of public servants or civil servants whose retirement future hangs in the balance, not because there is no law, but because the law has not been activated,” she said. She emphasized that pension reform is not optional but a fiscal imperative and statutory obligation. The development comes weeks after Oloworaran stated that the next frontier of ongoing pension reforms is targeted at over 75 million informal workers in Nigeria. She made this disclosure at the executive launch of Awabah, PenCom’s pioneer Accredited Pension Agent. The Commission had licensed Awabah as the first Accredited Pension Agent (APA) for enrolling contributors under the Personal Pension Plan, marking a new phase in Nigeria’s pension reform journey. What you should know According to a Nairametrics report, Nigeria’s total Retirement Savings Account (RSA) registrations reached 10.19 million by the end of 2023, up from 9.86 million in 2022, while total pension assets grew by N3.36 trillion to N18.36 trillion, marking the fastest year-on-year growth on record at 22.43%. • The Contributory Pension Scheme (CPS) covers over 10 million Nigerians, including public servants, private-sector employees, and informal workers under the Micro Pension Plan. • The Commission disclosed that more than 552,000 retirees currently receive regular monthly pensions, while over 844,000 retirees across the public and private sectors have accessed either monthly or lump-sum benefits. Its Personal Pension Plan (PPP), formerly known as the Micro Pension Plan (MPP), has emerged as one of the fastest-growing segments of Nigeria’s pension industry, recording a remarkable ninefold increase in contributions over the past four years. Contributions grew from N168.63 million in June 2021 to N1.46 billion by June 2025.