PenCom engages Lagos, LASPEC on pension increments

The National Pension Commission has initiated high-level engagements with the Lagos State Government and the Lagos State Pension Commission over ongoing concerns surrounding the administration of benefits under the Contributory Pension Scheme, particularly the implementation of pension increments and approved wage awards.

PenCom made this known in an official statement released on Monday, following public demonstrations by retirees under the auspices of the Nigeria Union of Pensioners and the Contributory Pension Scheme sector in Lagos.

The retirees had gathered near the Lagos House, Ikeja, demanding the implementation of consequential adjustments, payment of wage awards, and the clearance of outstanding pension benefit arrears.

Reacting to the developments, the industry regulator stated that it recognised the importance of ensuring retirees receive all legitimate entitlements while acknowledging the hardship caused by delays in implementing approved adjustments.

“PenCom has engaged with the Lagos State Government and the Lagos State Pension Commission on matters related to the administration of pensions under the CPS, including the need to extend appropriate pension adjustments to eligible CPS retirees,” the Commission stated.

PenCom explained that implementing pension enhancements under the CPS framework involves complex processes, including determining eligibility, calculating actuarial liabilities, securing funding, and issuing operational guidelines to Pension Fund Administrators.

It assured retirees and stakeholders that it was working closely with the state government, LASPEC, PFAs, and union representatives to reach a transparent, orderly, and sustainable resolution.

The intervention comes despite Lagos State maintaining one of the highest compliance records under the CPS nationwide. Official records from LASPEC indicate that the state government has disbursed a cumulative N168.2bn in accrued rights to over 48,000 retirees since the inception of the scheme in 2007.

Under the administration of Governor Babajide Sanwo-Olu, the state disbursed over N92bn in accrued rights to more than 25,000 retirees between May 2019 and mid-2026, including a landmark N5bn single-batch payment in July 2024 aimed at clearing backlog liabilities.

Accrued rights represent the benefits built up by civil servants who were in service before the full transition to the CPS in 2007, covering both gratuity and pension obligations funded directly by the state treasury before PFA management.

However, the delay in extending recent federal and state wage awards alongside consequential pension adjustments to CPS retirees has remained a major point of friction across several states. Unlike the old Defined Benefits Scheme, where increments are directly disbursed from government coffers, pension adjustments under the CPS require actuarial computations and direct funding injections into individual Retirement Savings Accounts to avoid destabilising PFA investment portfolios.

The broader national pension landscape also faces structural funding deficits. Recent regulatory data from PenCom indicates that a significant proportion of registered RSAs nationwide remain unfunded due to irregular remittance by employers, highlighting ongoing challenges in deepening pension compliance across public and private sector organisations.

PenCom reiterated its commitment to upholding its supervisory mandate, assuring contributors and pensioners that it would ensure full compliance with the provisions of the Pension Reform Act 2014.