By Favour Akinmola
The National Pension Commission (PenCom) has opened discussions with the Lagos State Government and the Lagos State Pension Commission (LASPEC) over delays in implementing pension increases and wage awards for retirees under the Contributory Pension Scheme (CPS), following growing concerns among affected pensioners.
The intervention comes after pensioners in the state protested over the non-implementation of approved consequential pension adjustments, wage awards and other outstanding benefits, putting renewed focus on the treatment of retirees under the CPS.
PenCom, in a statement, said it recognised the importance of ensuring that retirees receive all benefits legitimately due to them, while acknowledging concerns arising from delays in implementing approved pension adjustments.
The commission disclosed that it had engaged both the Lagos State Government and LASPEC on the administration of pensions under the CPS, particularly the need to extend appropriate pension adjustments to eligible retirees.
According to PenCom, implementing a pension enhancement under the CPS requires more than an approval, as the process involves determining eligibility, establishing the applicable adjustment, assessing the resulting actuarial liability, securing funding and providing relevant data and instructions to pension operators.
The regulator said it was engaging the relevant stakeholders to ensure that these processes were properly addressed, stressing that it would continue to work with the Lagos State Government, LASPEC, Pension Fund Administrators (PFAs) and representatives of pensioners towards a transparent, orderly and sustainable resolution.
“PenCom will continue to work with the Lagos State Government, LASPEC, PFAs, and representatives of pensioners towards a transparent, orderly, and sustainable resolution of the issues,” the commission stated.
The development highlights a growing issue in Nigeria’s pension industry: the gap between policy decisions approving improved retirement benefits and the practical process of translating such approvals into higher monthly payments for retirees.
PenCom had earlier urged the Lagos State Government to extend periodic pension increases currently enjoyed by retirees under the Defined Benefit Scheme (DBS) to their counterparts under the CPS. The commission’s Director-General, Omolola Oloworaran, made the request during a visit to Governor Babajide Sanwo-Olu, arguing that CPS retirees should also benefit from periodic pension adjustments.
Lagos has nevertheless recorded significant progress in its pension obligations. Available official figures show that the state has paid N168.2 billion in accrued rights to more than 48,000 retirees since the commencement of the CPS in 2007.
The latest dispute, however, has shifted attention from accrued-right payments to the treatment of CPS retirees affected by more recent pension adjustments and wage awards.
For pension industry stakeholders, the issue is particularly important because the CPS was designed to create a sustainable and transparent retirement system in which pension benefits are linked to accumulated contributions and investment returns.
PenCom has maintained that state governments must strengthen implementation of the CPS to ensure workers receive retirement benefits as and when due. The commission has also described pension administration as an important measure of how governments protect workers after their years of service.
The Lagos development comes at a time when PenCom is seeking broader reforms to Nigeria’s pension system, including proposals to increase statutory pension contributions and strengthen retirement savings.
Against this background, industry observers say resolving outstanding concerns around pension adjustments will be critical to sustaining confidence in the CPS, particularly among workers approaching retirement.
For the affected retirees, however, the immediate concern remains when approved increases and wage awards will begin to reflect in their monthly pensions.
PenCom did not give a specific timeline for the conclusion of the engagements or commencement of the adjustments, but said it remained committed to protecting the interests of pension contributors and retirees and would continue to exercise its regulatory and supervisory mandate to ensure compliance with applicable pension laws and regulations.
