The National Pension Commission (PenCom) has begun discussions with the Lagos State Government and the Lagos State Pension Commission (LASPEC) over the implementation of pension increments and approved wage awards for retirees under the Contributory Pension Scheme (CPS).
The engagement followed protests by retirees under the Nigeria Union of Pensioners and the CPS sector in Lagos, who demanded the implementation of consequential pension adjustments, payment of wage awards and settlement of outstanding pension benefit arrears.
In a statement on Monday, PenCom said it recognised the importance of ensuring that retirees receive their 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 said.
The regulator explained that pension enhancements under the CPS require several processes, including determining beneficiaries’ eligibility, calculating actuarial liabilities, securing funding and issuing operational guidelines to Pension Fund Administrators (PFAs).
PenCom said it was working with the Lagos government, LASPEC, PFAs and representatives of the retirees to achieve a transparent and sustainable resolution.
The development comes against the backdrop of Lagos’ record in meeting its accrued pension obligations under the CPS.
According to LASPEC records, the state government has paid N168.2 billion in accrued rights to more than 48,000 retirees since the commencement of the CPS in 2007.
Under the administration of Governor Babajide Sanwo-Olu, more than N92 billion has been paid to over 25,000 retirees between May 2019 and mid-2026.
The state also made a N5 billion single-batch payment in July 2024 as part of efforts to clear outstanding liabilities.
Accrued rights are retirement benefits accumulated by workers who were in service before the transition to the CPS in 2007. They comprise gratuity and pension obligations funded directly by the state before the management of retirement savings was transferred to PFAs.
However, the implementation of recent wage awards and consequential pension adjustments has emerged as a source of concern for CPS retirees.
Unlike the former Defined Benefits Scheme, where pension increases are paid directly by government, adjustments under the CPS require actuarial calculations and funding into individual Retirement Savings Accounts (RSAs).
PenCom said the process was necessary to ensure that pension enhancements were properly funded and did not undermine the sustainability of pension fund investments.
The commission also reiterated its commitment to enforcing the provisions of the Pension Reform Act 2014 and protecting the interests of pension contributors and retirees
It assured stakeholders that it would continue to exercise its supervisory mandate and work with relevant parties to resolve the concerns surrounding pension adjustments.
