Pension regulator says it may deploy “enforcement tools” as concerns grow over millions of civil servants without effective retirement protection….
The National Pension Commission (PenCom) has hinted at stronger measures to compel state governments to comply with Nigeria’s pension reform laws, warning that many states are still failing to fully implement contributory pension schemes despite existing legislation.
PenCom Director-General, Omolola Oloworaran, disclosed this on Thursday during a press briefing held alongside the maiden edition of the Commission’s bi-annual consultative session for Heads of Service from states yet to fully adopt or operationalize the Contributory Pension Scheme (CPS) or the Contributory Defined Benefits Scheme.
The high-level engagement brought together pension officials, state Heads of Service, and senior government representatives, including the Head of the Civil Service of the Federation, Didi Esther Walson-Jack.
Speaking to journalists after the session, Oloworaran acknowledged that PenCom currently lacks the constitutional authority to directly sanction non-compliant states. However, she revealed that the Commission is already exploring alternative mechanisms that could pressure state governments into implementing pension laws already passed within their jurisdictions.
“I think in the next one or two years, we’ll continue to engage and see what we achieve,” she said.
But she added that the Commission is actively considering stronger measures behind the scenes.
“We can’t sanction them directly, but there are tools available to the Commission that we can leverage to force their hands to do the right thing,” Oloworaran stated.
According to her, PenCom’s immediate focus is ensuring that states move beyond merely passing pension laws to fully executing them.
She noted that while many state governments have enacted pension reform legislation, implementation remains weak, inconsistent, or completely inactive in several cases.
“Passing the law is one thing; activating and implementing it is another,” she explained, adding that institutional, financial, and administrative challenges continue to slow progress across many states.
Despite the setbacks, the PenCom DG said the Commission would continue working closely with state governments and Heads of Service to resolve operational bottlenecks and accelerate implementation.
The warning comes amid growing concern over the retirement future of millions of civil servants across Nigeria’s sub-national governments.
During the engagement, Oloworaran revealed that only seven states and the Federal Capital Territory are currently fully implementing pension reform laws.
According to her, while 30 states and the FCT have enacted laws establishing either the Contributory Pension Scheme or the Contributory Defined Benefits Scheme, many of those laws remain dormant or only partially operational.
She further disclosed that six states are yet to pass pension reform bills through their respective Houses of Assembly.
“That leaves 23 states whose laws are inactive, partially implemented, or completely unactivated,” she said.
“Twenty-three sets of public servants whose retirement future remains uncertain, not because there is no law, but because the law has not been implemented.”
Oloworaran stressed that pension reform should no longer be treated as a policy option but as a statutory and fiscal necessity for sustainable governance and worker welfare.
On her part, Head of the Civil Service of the Federation, Didi Esther Walson-Jack, commended PenCom for adopting what she described as a “whole-of-government approach” toward pension reform implementation.
She said the Commission possesses the technical expertise needed to support states in building effective pension systems capable of protecting civil servants after retirement.
Walson-Jack also urged state governments to prioritize pension compliance, noting that workers at the state level deserve the same retirement protections available to federal civil servants.
The latest development comes as PenCom intensifies broader reforms aimed at expanding pension coverage across Nigeria.
Just weeks earlier, Oloworaran announced that the next major target of the country’s pension reform drive would be Nigeria’s massive informal sector, estimated at more than 75 million workers.
She made the disclosure during the executive launch of Awabah, PenCom’s first licensed Accredited Pension Agent under the Personal Pension Plan initiative.
The move marked a significant milestone in efforts to deepen pension inclusion among self-employed Nigerians, small business operators, artisans, traders, and informal workers traditionally excluded from structured retirement savings systems.
Nigeria’s pension industry has recorded rapid growth in recent years.
According to industry data, total Retirement Savings Account registrations climbed to 10.19 million by the end of 2023, compared to 9.86 million recorded a year earlier.
Total pension assets also surged by N3.36 trillion to reach N18.36 trillion — representing the fastest annual growth ever recorded in the industry at 22.43 per cent.
PenCom says more than 552,000 retirees currently receive regular monthly pensions, while over 844,000 retirees across both public and private sectors have already accessed either lump-sum or programmed retirement benefits.
Meanwhile, contributions under the Personal Pension Plan formerly known as the Micro Pension Plan have expanded dramatically over the past four years, rising from N168.63 million in June 2021 to N1.46 billion by June 2025.
For many analysts, however, the bigger challenge remains at the state level, where weak implementation, unpaid pension obligations, and inconsistent political commitment continue to threaten retirement security for millions of Nigerian workers.
