The National Pension Commission (PenCom) has begun the process of reviewing the Pension Reform Act, 2014, saying the law must be updated to reflect present-day realities, close implementation gaps and improve retirement benefits for millions of Nigerians.
The Director-General of PenCom and Chairman of the Pension Industry Leadership Council, Omolola Oloworaran, disclosed this on Tuesday after the third meeting of the Pension Industry Leadership Council held at Fraser Suites in Abuja.
She said the review was necessary because the current law, which has been in operation for about 12 years, no longer adequately addresses the changing needs of Nigeria’s pension industry and contributors.
According to her, the planned amendments are aimed at strengthening the Contributory Pension Scheme, improving service delivery and ensuring that retirees enjoy better financial security after leaving active service.
“The reason we are reviewing is to modernise the Act,” Oloworaran said while responding to questions from journalists.
“Things continue to change, and we continue to come up with reform ideas that improve the lives of ordinary Nigerians who are part of the scheme. So, the whole essence of the review is to modernise the Act and ensure that it reflects conditions of today.”
She explained that beyond modernising the legislation, the review would also address weaknesses identified during the implementation of the existing law.
According to her, some practical challenges have emerged over the years, making it necessary to update the legal framework guiding pension administration in Nigeria.
“Certainly, we did have some implementation gaps in the previous Act that we’ll also try and correct in this Act,” she said.
Although she declined to disclose the specific amendments under consideration, Oloworaran said consultations with stakeholders across the pension industry were still ongoing.
She assured contributors that every proposed amendment was designed to improve their welfare and strengthen the pension system.
“One thing you should know is that all the amendments that are being proposed are all in the interest of ordinary Nigerians who are part of the scheme, and it will make their lives better,” she added.
The quarterly meeting of the Pension Industry Leadership Council brought together leaders of Pension Fund Administrators (PFAs), Pension Fund Custodians (PFCs), Closed Pension Fund Administrators (CPFAs) and officials of PenCom to review the performance of the industry and discuss reforms.
According to the commission, discussions focused on improving retirement outcomes, increasing pension awareness, strengthening investment opportunities and expanding participation in the pension system.
Oloworaran said one of the major priorities identified during the meeting was the need to ensure better retirement outcomes for workers contributing to the scheme.
She stressed that the pension industry must continually introduce reforms that increase confidence among contributors while protecting their retirement savings.
To improve public understanding of pensions, PenCom also announced plans to organise its first National Pension Week from September 15 to September 19.
The event, according to the commission, will focus on educating Nigerians about the benefits of pension savings and encouraging wider participation, particularly among workers in the informal sector.
“We’ve seen a gap in pension literacy and awareness,” Oloworaran said.
“So, the committee is working on a bunch of initiatives to improve the literacy amongst Nigerians so that people can understand pensions more.
“This will help us with accountability and better transparency to contributors and, in addition to that, create more awareness to be able to drive our Personal Pension Plan better.”
She noted that despite years of reforms, many Nigerians still have limited understanding of how the pension system works, especially workers outside the formal sector.
According to her, improving public awareness will increase confidence in the system and encourage more people to enrol voluntarily.
The PenCom boss also disclosed that the industry plans to strengthen its engagement with operators in the capital market.
She explained that pension funds remain Nigeria’s largest source of long-term domestic savings and can play a greater role in financing economic development.
She revealed that work on the proposed Pension Industry Infrastructure Fund had reached an advanced stage.
The fund is expected to provide opportunities for pension assets to support major infrastructure projects while generating returns for contributors under appropriate regulatory safeguards.
Oloworaran further announced that PenCom is introducing a liability-driven investment framework to improve retirement outcomes.
According to her, the commission is studying global best practices to ensure pension investments deliver sustainable returns that translate into better benefits for retirees.
“We continue to look at all initiatives, both locally and globally, that can help us to achieve our goals in terms of ensuring that we’re putting more money in the hands of ordinary Nigerians, and that when people retire, they can retire with peace of mind,” she said.
On compliance, the PenCom Director-General warned that the commission would intensify enforcement against employers who fail to remit workers’ pension contributions.
She disclosed that PenCom is expanding its collaboration with anti-corruption agencies to ensure compliance with pension laws.
According to her, after partnering with the Independent Corrupt Practices and Other Related Offences Commission (ICPC), the commission will soon begin working with the Economic and Financial Crimes Commission (EFCC).
“Compliance and enforcement remain a top priority for us,” she said.
“PenCom continues to work with the necessary agencies, ICPC and now EFCC, to be included very soon, to ensure that all employers are contributing pensions for their staff and are remitting as well.”
She also expressed concern over the slow adoption of the Contributory Pension Scheme by state governments.
According to Oloworaran, only eight states have fully implemented the scheme, although two more are close to joining.
She warned that workers in states that have yet to adopt the scheme face uncertainty regarding their retirement benefits.
The Contributory Pension Scheme was introduced under the Pension Reform Act to replace the old defined benefits system and ensure that both employers and employees contribute towards retirement savings.
While the Federal Government and many private sector employers have adopted the scheme, implementation by state governments has remained uneven.
Oloworaran also admitted that PenCom has not achieved its target of enrolling one million women under its Personal Pension Plan.
“I was hoping that we would get one million women on board, but we haven’t even gotten close to that. The numbers are still very low, which is why I spoke about awareness and pension literacy,” she said.
She explained that the commission is engaging market women associations, transport unions, artisans and other groups in an effort to expand pension coverage within the informal sector.
On healthcare for retirees, Oloworaran disclosed that PenCom has expanded eligibility for its pilot health insurance programme.
She said the income threshold has been increased from pensioners receiving monthly pensions of N70,000 and below to those earning up to N150,000.
The adjustment, she explained, is intended to increase participation during the pilot phase.
According to her, the programme currently has about 13,000 participants, well below the target of 30,000.
“We have 13,000 people, and we need to be able to run the pilot with a critical mass,” she said.
“So everybody that takes pension of N150,000 and below can go and try to onboard on the initiative, and they’ll be entitled to three years of health insurance.”
She explained that the higher eligibility limit is temporary and will help generate sufficient participation before the programme is fully implemented nationwide.
The Pension Reform Act, first enacted in 2004 and substantially revised in 2014, established the Contributory Pension Scheme to ensure that Nigerian workers receive their retirement benefits promptly while reducing the burden of pension liabilities on government.
PenCom said the ongoing review is expected to build on those reforms by strengthening governance, improving compliance, expanding pension coverage and ensuring that retirees enjoy greater financial security in an evolving economy.