The National Pension Commission (PenCom) has initiated a review of the Pension Reform Act 2014, aiming to update the legislation to reflect current realities and enhance retirement outcomes for millions of Nigerians. This move comes 12 years after the law was last amended.
Omolola Oloworaran, Director-General of PenCom and Chairman of the Pension Industry Leadership Council, announced the review on Tuesday during a press conference following the Council's third quarterly meeting in Abuja. The meeting gathered leaders from Pension Fund Administrators, Pension Fund Custodians, Closed Pension Fund Administrators, and the Commission to discuss industry performance and ongoing reforms.
Modernizing Pension Legislation
Oloworaran emphasized that the legislation requires modernization to support ongoing reforms and ensure it reflects contemporary conditions. She stated that the review would also address weaknesses identified during the implementation of the existing law, which has been in effect for over a decade.
While specific amendments were not disclosed due to ongoing consultations with stakeholders, Oloworaran assured that all proposed changes are in the interest of ordinary Nigerians participating in the scheme, aiming to improve their welfare and retirement benefits.
Industry Initiatives and Compliance
Discussions at the Council meeting also focused on initiatives to make Nigeria’s pension industry more inclusive and globally competitive. These include improving retirement outcomes, expanding pension awareness and literacy, strengthening industry participation in the capital market, and advancing the proposed Pension Industry Infrastructure Fund.
To address the gap in pension literacy, PenCom will hold its first National Pension Week from September 15 to September 19. This initiative aims to improve understanding of pension administration, foster accountability, enhance transparency, and drive the Personal Pension Plan.
The commission also plans to deepen engagement with capital market operators, recognizing pension funds as the country’s largest pool of long-term domestic savings. Additionally, PenCom is introducing a liability-driven investment framework to further improve retirement outcomes for contributors.
Compliance and enforcement remain a top priority for PenCom. Oloworaran revealed that the commission would strengthen enforcement against employers failing to remit workers’ pension contributions. PenCom has already partnered with the Independent Corrupt Practices and Other Related Offences Commission (ICPC) and will soon include the Economic and Financial Crimes Commission (EFCC) in these efforts. Over N3bn in unremitted pension contributions has already been recovered from defaulting employers through collaboration with the ICPC.
Expanding Coverage and Benefits
During the press conference, Oloworaran noted that only eight states have fully implemented the Contributory Pension Scheme, with two additional states nearing full adoption. She expressed concern for workers in states yet to adopt the scheme, highlighting the uncertainty they face regarding their retirement benefits.
Regarding the Personal Pension Plan, PenCom admitted it has not made significant progress towards its target of enrolling one million women. The numbers remain low, prompting the commission to engage market women associations, transport unions, and other groups to increase participation in the informal sector.
The pilot health insurance initiative for retirees has expanded its eligibility criteria to include pensioners earning up to N150,000 monthly, an increase from the previous N70,000 threshold. This temporary expansion aims to boost enrolment, with the pilot currently having about 13,000 participants against a target of 30,000. Eligible retirees can access three years of health insurance under this initiative.
