The National Pension Commission (PenCom) has disclosed plans to increase statutory pension contribution rates as part of an ongoing review of the Pension Reform Act (PRA) 2014. This announcement was made by PenCom Director-General, Ms. Omolola Oloworaran, on Tuesday during the 2026 Pension Consultative Forum for States, the Federal Capital Territory (FCT), and Licensed Pension Fund Operators (LPFOs) held in Lagos.
Under the existing pension framework, employers are mandated to contribute a minimum of 10% of an employee’s monthly emoluments, while employees contribute 8%. This brings the total mandatory pension contributions to 18%, a figure PenCom now intends to increase.
Stakeholder Engagement and Proposed Amendments
Ms. Oloworaran stated that PenCom is actively engaging key stakeholders, including organised labour and members of the National Assembly, on proposed amendments to the PRA 2014. These amendments are aimed at enhancing retirement security through higher contribution rates.
She affirmed, “We are having active conversations regarding the review of the Pension Reform Act with all necessary parties, including Labour and the National Assembly. It is still at the engagement stage. The rates of contribution will certainly go up, but we must ensure that all key stakeholders buy into it first.”
Addressing State Compliance and Funding Challenges
The PenCom chief expressed significant concern over the slow pace of adoption of the Contributory Pension Scheme (CPS) at the sub-national level. She noted that only 8 of Nigeria’s 36 states are currently operating the scheme in compliance with the law.
“I am not satisfied at all with where we are,” Oloworaran said, adding, “If you were to rate it, we still have an ‘F9.’ We still have only eight states out of 36 states complying. There has to be more political will. Governors must prioritise their workers and their future when they retire—not just worry about today. All 36 states should be under the Contributory Pension Scheme.”
To address concerns raised by non-compliant states regarding funding and operational challenges, PenCom is examining ways to create sustainable revenue sources for state pension bureaus. Oloworaran stated, “We have listened to them, and I think there is a good point in what they are saying. We will explore ways to create income streams for state pension bureaus. It might not be in the exact form they are prescribing, but we will certainly do something.”
The PenCom DG also condemned the practice of some state governments deducting pension contributions from workers’ salaries without remitting them into Retirement Savings Accounts (RSAs). She described this as a practice that “should never happen,” warning that it could lead to skyrocketing pension obligations and a broken system in the future. PenCom plans to actively engage these states to halt this practice.
Pension Asset Growth
Meanwhile, Nigeria’s pension assets rose 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 growing by approximately N384.98 billion within one month.
On a year-on-year basis, total pension assets increased by 29.5% from N24.18 trillion in May 2025. This highlights the continued expansion of the industry and the growing importance of pension savings in Nigeria’s financial system. The Pension Reform Act 2014 was enacted following a review of the 2004 pension law, which introduced the Contributory Pension Scheme and established PenCom as the regulator of Nigeria’s pension industry.
