The National Pension Commission (PenCom) has begun reviewing the Pension Reform Act (PRA) 2014 as part of efforts to align Nigeria's pension law with evolving economic realities, close implementation gaps and improve retirement outcomes for millions of contributors across the country.
The move comes 12 years after the legislation was last amended, with the Commission saying reforms are necessary to support new initiatives, strengthen pension administration and enhance the welfare of workers and retirees.
Speaking on Tuesday after the third meeting of the Pension Industry Leadership Council (PILC) held at Fraser Suites in Abuja, PenCom Director-General and Chairman of the Council, Omolola Oloworaran, said the review was aimed at modernising the country's pension framework to meet present-day realities.
The quarterly meeting brought together Pension Fund Administrators (PFAs), Pension Fund Custodians (PFCs), Closed Pension Fund Administrators (CPFAs) and officials of the Commission to assess the industry's performance, review ongoing reforms and outline new priorities for the pension sector.
PenCom explains reason for reviewing pension law
Responding to questions from journalists, Oloworaran said the existing law has served the industry well but now requires updates to accommodate emerging reforms and address shortcomings observed during implementation.
"The reason we are reviewing is to modernise the Act," she said.
"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 noted that the Commission had identified implementation challenges over the years and intends to address them through the amendment process.
"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 being proposed, Oloworaran explained that consultations with key stakeholders were still ongoing.
She, however, assured contributors that every proposed amendment is designed to improve their welfare.
"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 said.
PenCom to deepen pension awareness
Beyond the proposed legal reforms, PenCom said it is placing greater emphasis on pension awareness and financial literacy to improve participation in the contributory pension scheme.
According to Oloworaran, one of the major outcomes of the Pension Industry Leadership Council meeting was the shared commitment to ensuring better retirement outcomes for contributors.
"One thing that was clear from today's engagement is the need to ensure better outcomes for all contributors, for ordinary Nigerians contributing to this scheme," she said.
As part of that effort, the Commission announced plans to host its maiden National Pension Week from September 15 to September 19, aimed at educating Nigerians on pension administration and encouraging wider participation.
"We've seen a gap in pension literacy and awareness. 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."
Infrastructure investment, capital market participation
The Commission also said discussions at the council meeting focused on strengthening the pension industry's contribution to Nigeria's capital market and advancing the proposed Pension Industry Infrastructure Fund.
According to Oloworaran, pension assets remain the country's largest pool of long-term domestic savings and could play a more significant role in financing infrastructure and economic development.
She also disclosed that PenCom is introducing a liability-driven investment framework aimed at improving retirement outcomes by aligning investment strategies with future pension obligations.
"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.
EFCC to join pension enforcement drive
On compliance, the PenCom boss said the Commission is stepping up enforcement against employers who fail to remit workers' pension contributions.
She revealed that after partnering with the Independent Corrupt Practices and Other Related Offences Commission (ICPC), PenCom would soon begin working with the Economic and Financial Crimes Commission (EFCC) to recover outstanding pension deductions and sanction defaulters.
"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."
The development follows recent enforcement efforts that resulted in the recovery of more than N3 billion in unremitted pension contributions from defaulting employers.
Only eight states fully implementing contributory pension scheme
Oloworaran also expressed concern over the slow adoption of the Contributory Pension Scheme (CPS) by state governments.
According to her, only eight states have fully implemented the scheme, although two additional states are nearing full compliance.
She warned that workers in states yet to adopt the CPS remain vulnerable to uncertainty regarding their retirement benefits.
One million women target yet to be achieved
The PenCom Director-General also acknowledged that the Commission has fallen short of its ambitious target of enrolling one million women under the Personal Pension Plan (PPP).
"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 PenCom is engaging market women associations, transport unions and other informal sector groups to boost participation among self-employed Nigerians and workers outside the formal employment sector.
Retirees' health insurance pilot expanded
On the Commission's pilot health insurance initiative for retirees, Oloworaran disclosed that eligibility has been expanded to encourage greater participation.
Initially limited to retirees receiving monthly pensions of N70,000 and below, the programme now covers pensioners earning up to N150,000 monthly.
According to her, the pilot currently has about 13,000 participants, well below its target of 30,000 retirees.
"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 increased income threshold is a temporary measure designed to boost enrolment before the programme is fully implemented nationwide.