Pension Reform Momentum Grows as PenCom Recovers ₦1.58bn, Assets Top ₦23tn
Nigeria’s pension landscape is seeing quiet but meaningful evolution, as the National Pension Commission (PenCom) steps up enforcement and deepens collaboration with states. The Commission has recovered ₦1.58 billion from defaulting employers and announced that pension assets have surged past ₦23 trillion as of February 2025 — a fresh milestone in the country’s 20-year transition to a fully funded retirement benefits system.
The updates were disclosed by PenCom Director-General, Ms. Omolola Oloworaran, during the First Run 2025 Consultative Forum for States and the FCT, held in Kano.
“These recoveries reflect the Commission’s intensified compliance drive, and we are seeing measurable progress in state-level adoption of the Contributory Pension Scheme (CPS),” Oloworaran said.
Enforcement Yields Results, but Systemic Gaps Persist
The ₦1.58 billion recovery underscores PenCom’s growing regulatory muscle, especially through its compliance and recovery agents tasked with tracking unpaid remittances. However, enforcement alone cannot solve the system’s lingering fragmentation.
While 25 states and the FCT have enacted CPS laws, only eight states have fully implemented the scheme. Six others run hybrid models, and another six are at advanced legislative stages.
“We commend states making strides — including Katsina, Yobe, Bauchi, and Abia. But we must bridge the implementation gap,” Oloworaran said.
To tackle political resistance and fiscal constraints at the subnational level, PenCom has introduced a phased adoption model — allowing states to enrol new employees or those with under 10 years of service, while planning for legacy staff.
🔧 Building a Sustainable, Inclusive Pension Future
As Nigeria’s pension fund assets grow — now at ₦23 trillion, PenCom is shifting focus from expansion to resilience and inclusion.
The Commission is providing technical assistance to help states calculate and manage legacy liabilities — a major stumbling block for full CPS adoption. The goal is to create a financially sustainable transition pathway that ensures long-term benefit security for retirees.
“With sustained dialogue, political will, and sound planning, we believe all states can come onboard the CPS,” the PenCom boss said, calling the forum “a call to collective action.”
🏛️ Kano Sets Example with ₦16bn Pension Backlog Payment
In a show of subnational commitment, Kano State reaffirmed its pension reform stance. According to the Head of Service, Alhaji Abdullahi Musa, the state has paid ₦16 billion of inherited pension arrears — covering around 40% of its backlog — and continues to operate a hybrid system blending the old defined benefits with the new CPS.
“The state under Governor Abba Kabir is serious about reform. We’re modernising pension administration and reducing the burden on future governments,” Musa said, praising PenCom’s role in setting national standards.
📌 BRANDECONOMY Insight: Why This Matters
Nigeria’s pension system is one of Africa’s most structured — but also dangerously bifurcated between federal and state realities. While private sector compliance is rising, subnational inertia and legacy liabilities threaten long-term reform success.
With rising pension assets, investors, PFAs, and policy experts are calling for:
- Improved transparency in state-level pension funds.
- Greater investment diversification of pension assets to support infrastructure, housing, and SMEs.
- Tighter integration between federal and subnational fiscal strategies.
BOTTOM LINE:
PenCom’s ₦1.58bn recovery and ₦23tn milestone reflect a maturing pension ecosystem. But reform must go deeper, faster — especially at the state level — to deliver retirement security for all Nigerians.
