PenCom Expands Pension Coverage, Boosts Retirement Benefits

By Johnson Emmanuel

The Director-General of the National Pension Commission (PenCom), Omolola Oloworaran, recently told the State House Press Corps that the commission has recorded significant reforms during her 24 months in office, anchored by President Bola Ahmed Tinubu’s approval of a N758 billion intervention that cleared over two decades of outstanding pension liabilities and increased monthly pensions under the Contributory Pension Scheme (CPS). Describing the achievements as “twenty-four months of evidence,” she highlighted rapid pension asset growth, rising contributor enrolment, higher monthly pension payments and pension adjustments for retirees. Oloworaran also clarified that the Nigeria Police Force remains under the CPS, while outlining reforms to improve police retirement benefits, expand micro pension enrolment, strengthen complaint resolution and maintain prudent investment oversight.

DECISION HIGHLIGHT

PenCom is repositioning pension reform from routine administration towards retirement income adequacy, broader pension inclusion and long-term capital mobilisation.

DECISION MEMO

The commission’s latest reforms suggest a broader policy shift from managing pension liabilities to strengthening retirement security and deepening the pension industry’s role in Nigeria’s financial system.

Presenting what she described as “twenty-four months of evidence,” Oloworaran credited President Tinubu’s N758 billion intervention with resolving pension obligations that had remained outstanding for more than two decades while improving monthly benefits under the CPS. Pension assets have since expanded beyond N31 trillion, accompanied by higher contributor enrolment and increased monthly pension payments, reinforcing the industry’s role as a major source of long-term domestic capital.

Addressing concerns over the Nigeria Police Force, Oloworaran dismissed reports that the Force had exited the CPS. She said: “The police have not exited the CPS. They want to exit because they believe their benefits are too small. They compare their benefits with those of the military and are not happy with that. They want to be at par with the military.”

She maintained that PenCom’s priority is improved retirement benefits rather than withdrawal from the scheme. According to her: “We share their frustration because we stand for anything that puts more money in the pockets of ordinary Nigerians. What they want is improved benefits. If we achieve that, it doesn’t matter whether it is done within the scheme or outside it. We are engaging the appropriate authorities on how police pensions can be reviewed and improved.”

Acknowledging differing opinions within the Force, she added: “There are different camps within the police. Some are not fully aligned with what we are doing, but many simply want a better standard of living after retirement. That is exactly what PenCom is fighting for.”

Beyond benefit reforms, PenCom is reinforcing public confidence through stronger service delivery and wider pension inclusion. Oloworaran said: “If anyone has genuine issues, they should bring them to us. Every day, our team monitors social media for complaints. Once we identify one, we reach out immediately to establish the facts and resolve the matter.” She disclosed that a Customer Relationship Management platform would centralise complaint resolution nationwide.

On expanding pension coverage, she said: “We are putting the building blocks in place. We have digitised onboarding, simplified the registration process and licensed three accredited pension agents, while four more are undergoing approval. This year is about building the foundation, and within the next two years we expect to begin seeing significant results.”

Defending the commission’s investment framework, Oloworaran stated: “You cannot simply invest pension funds in any company. There are clear investment guidelines. Companies must demonstrate profitability, maintain strong credit ratings and meet other regulatory requirements before pension funds can be invested.” She further justified allowing Pension Fund Administrators to invest in parent companies of pension custodians, saying: “The risks were carefully assessed before the decision was taken. These are well-capitalised institutions with strong track records, and all investments remain subject to PenCom’s stringent regulatory oversight.”

Collectively, the reforms indicate that PenCom is evolving beyond pension administration into an institution focused on retirement security, financial inclusion and long-term domestic capital formation.

DATA BOX

• Presidential pension intervention: N758 billion
• Outstanding pension liabilities resolved: More than 20 years
• Pension assets: N20.79 trillion to N31.48 trillion
• Asset growth: N10.69 trillion
• Growth rate: 51 percent
• New pension contributors: 938,229
• Monthly pension payments: N12.2 billion to N14.9 billion
• Increase in monthly pension payouts: 22 percent
• Consequential adjustment: N32,000 monthly
• Beneficiaries: More than 100,000 treasury-funded retirees
• Nigeria Social Insurance Trust Fund pension: N206,000 monthly
• Increase over previous benefit: More than 1,000 percent
• Accredited Pension Agents licensed: 3
• Additional agents awaiting approval: 4
• Nigeria Police Force: Remains under the Contributory Pension Scheme

WHO WINS / WHO LOSES

Wins

• Pension contributors through stronger retirement savings and regulatory oversight.
• Retirees benefiting from higher pensions and cleared arrears.
• Nigeria Police personnel if benefit improvements are achieved.
• Nigeria’s capital market through expanding institutional investment.

Loses

• Legacy pension liabilities.
• Administrative inefficiencies that undermine service delivery.

POLICY SIGNALS

The Federal Government is positioning pension reform as both a social protection mechanism and a long-term domestic capital mobilisation strategy, with greater emphasis on benefit adequacy, financial inclusion and prudent investment governance.

INVESTOR SIGNAL

A pension asset base exceeding N31 trillion strengthens the capacity of institutional investors to finance infrastructure, deepen capital markets and provide stable long-term domestic investment.

RISK RADAR

Maintaining pension adequacy will depend on inflation control, sustained contributor growth, prudent investment performance and continued regulatory discipline. Resolving police welfare concerns without weakening the CPS will also be critical to preserving confidence in the pension system.