The Director-General of the National Pension Commission (PenCom), Ms. Omolola Oloworaran, has clarified that the proposed increase in pension contribution rates, currently under review in the Pension Reform Act (PRA) 2014, will apply exclusively to employers and not to employees.
This clarification, made on Wednesday, July 22, 2026, addresses concerns that higher pension contributions could exacerbate the financial burden on Nigerian workers. PenCom had previously disclosed plans to raise statutory pension contribution rates to strengthen retirement security and improve the sustainability of the Contributory Pension Scheme (CPS).
Addressing the concerns in a post on X, Ms. Oloworaran emphasized, “For the avoidance of doubt, my comments were in relation to employer pension contributions, not employee contributions.” She added that engagements with organized labour, employer associations, and other key stakeholders are ongoing, and no final decision has been taken.
She reassured the public that PenCom would not introduce any reform that makes life harder for ordinary Nigerians, stating that any eventual reform would be based on consultations and evidence, aiming to strengthen retirement security while balancing the interests of workers, employers, and the broader economy.
Current Contributions and State Compliance
Under the existing pension framework, employers are mandated to contribute a minimum of 10% of an employee’s monthly emoluments, while employees contribute 8%, resulting in a combined minimum pension contribution of 18%. PenCom is proposing an upward review of only the employer contribution component as part of the broader pension reform process.
Speaking at the 2026 Pension Consultative Forum for States, the Federal Capital Territory (FCT), and Licensed Pension Fund Operators (LPFOs) in Lagos on Tuesday, Ms. Oloworaran noted that the commission is engaging organized labour, employer groups, and members of the National Assembly on proposed amendments to the PRA 2014. The forum aims to deepen stakeholder engagement and support efforts to align state pension systems with national standards under the CPS.
Ms. Oloworaran also expressed dissatisfaction with the low level of compliance among state governments, revealing that only 8 of Nigeria’s 36 states are currently implementing the scheme in line with legal requirements. She stated, “I am not satisfied at all with where we are. If you were to rate it, we still have an ‘F9.’ We still have only eight states out of 36 states complying.”
She urged governors to prioritize their workers and their future, emphasizing that all 36 states should be under the Contributory Pension Scheme. To encourage wider adoption, the PenCom DG disclosed that the commission is exploring mechanisms to create sustainable revenue streams for state pension bureaus.
Warning Against Unremitted Pension Deductions and Asset Growth
Ms. Oloworaran criticized the practice of some state governments deducting pension contributions from workers’ salaries without remitting the funds into their Retirement Savings Accounts (RSAs). She warned, “In my personal opinion, deducting funds from employees and putting them in a state account is something that should never happen.”
She further cautioned that any incoming governor who does not understand the original purpose of those funds could divert them elsewhere, leading to skyrocketing pension obligations and a broken system in the future. PenCom plans to actively engage those states to halt this practice.
Nigeria’s pension assets climbed to a record N31.32 trillion in May 2026, according to PenCom’s unaudited industry report released on June 29, 2026. This figure represents a 1.23% increase from N30.94 trillion recorded in April, with pension assets expanding by approximately N384.98 billion within one month.
On a year-on-year basis, total pension assets grew by 29.5% from N24.18 trillion in May 2025, underscoring the continued growth of the pension industry and the increasing importance of retirement savings in Nigeria’s financial system. The Pension Reform Act 2014, currently under review, succeeded the PRA 2004, which introduced the Contributory Pension Scheme and established PenCom as the regulator of the country’s pension industry.
