Abuja, March 27, 2025 – The National Pension Commission (PenCom) has advised states and local governments to implement the Contributory Pension Scheme (CPS).
Pencom gave the advice in a statement on Wednesday.
It said state and local governments could domesticate the CPS by enacting appropriate pension laws within their states.
Pencom urged all states and local governments to expedite the enactment of their CPS laws and take immediate steps toward full implementation to ensure a secure and sustainable pension system for their workforce.
According to Pencom, the Pension Reform Act (PRA) 2014, in Section 2(1), stipulates that the CPS applies to all public sector employees across the Federal Capital Territory (FCT), states, local governments, and private sector.
It said state and local governments had the constitutional right to legislate on pension matters within their jurisdictions under the 1999 Constitution of the Federal Republic of Nigeria (as amended), state governments
Pencom said the National Council of States, had In August 2006, adopted the CPS for all states and local governments and to support the adoption, PenCom had developed a Model State Pension Law to enable state governments modify it according to their unique needs.
” For a state to implement the CPS in full, the state is required to enact a law on CPS, establish a Pension Bureau, register its employees with Pension Fund Administrators (PFAs) and commence remittance of pension contributions.
” The state is also required to carry out actuarial valuation, commence funding of accrued pension rights, procure group life insurance for its employees, and open and fund a retirement benefits bond redemption fund account with the Central Bank of Nigeria (CBN) or PFA,” the statement said.
The commission, however, said in spite of all the enabling laws, many states were yet to establish their CPS.
It commended Lagos, FCT, Osun, Kaduna, Ekiti, Edo, Ondo, Delta, Benue, Anambra, and Jigawa, for their exemplary implementation of the CPS as at December 2024.
The commission said these states had set the benchmark for sustainable pension administration by ensuring that retirees receive their entitlements promptly.
It also listed some states that had the enacted laws to adopt the CPS, but were yet to made significant strides towards implementation.
These states include Abia, Adamawa, Bauchi, Bayelsa, Ebonyi, Enugu, Gombe, Imo, Kano, Katsina, Kebbi, Kogi, Nasarawa, Niger, Ogun, Oyo, Rivers, Sokoto, Taraba, and Zamfara.
PenCom urged these states to accelerate their efforts toward full implementation of the CPS, by timely remittance of both employer and employee pension contributions.
The statement also listed some state that had not taken any action toward the implementation of the CPS to include Akwa Ibom, Borno, Kwara, Plateau, Cross River and Yobe.
The commission said that the CPS offered long-term solution to the pension liabilities that many states currently face.
PenCom warned that failure to adopt the CPS would worsen pension debts, creating financial burdens for future administrations.
” By failing to address pension arrears, states are inadvertently creating a financial burden for future generations, as these liabilities will continue to grow.
” Adopting the CPS now will help states avoid these escalating costs and provide a more secure financial future for both retirees and taxpayers.”
