Imagine two civil servants retiring on the same day in Nigeria.
Amina in Lagos worked 35 years, contributed monthly to her Retirement Savings Account, and received her first pension payment 30 days after retirement.
Her contributions were deducted, matched by her state government, and remitted on time to her Pension Fund Administrator.
Bola in another state worked the same 35 years, but his state passed a pension law years ago and never activated it. No deductions were remitted, no accrued rights funded, and no pension bureau exists to process his file. His retirement future hangs in the balance, not because there’s no law, but because the law is inactive.
That’s the difference between full implementation and paper compliance under Nigeria’s pension reforms.
*Brief Summary*
The National Pension Commission, PenCom, says only seven states and the Federal Capital Territory are fully implementing pension reform laws, despite 30 states and the FCT having enacted Contributory Pension Scheme or Contributory Defined Benefits Scheme laws.
This leaves 23 states where laws exist but are inactive or only partially implemented, leaving thousands of civil servants uncertain about retirement.
PenCom DG Omolola Oloworaran described the situation as a constitutional and fiscal obligation, not a policy option, citing Section 210 of the 1999 Constitution.
*Key Highlights and Facts*
1. *Scale of the Gap*: Out of 36 states with pension reform laws, only seven states plus the FCT are fully implementing them.
2. *Inactive Laws*: 23 states have laws that are written but inactive or partially implemented. Six states still have bills awaiting passage.
3. *Implementation Means More Than Law*: PenCom stresses that real implementation requires regular remittance of contributions, funding accrued rights, and setting up functional pension institutions.
4. *Federal Progress*: The Federal Government has cleared outstanding pension liabilities by releasing N758 billion to settle accrued rights. PenCom says there are currently no outstanding pension liabilities at the federal level.
5. *Why It Matters*: Where CPS is working, retirees get paid promptly. Where it’s not, workers face beuracratic hardship and uncertainty after decades of service.
*Old Way vs New Way*
Under the old Defined Benefits Scheme, DBS, government paid pensions directly from its budget after retirement. It was unpredictable, underfunded, and often delayed for years.
Under the new Contributory Pension Scheme, CPS, both employer and employee contribute monthly—typically 10% and 8% of salary—into a Retirement Savings Account managed by licensed Pension Fund Administrators.
Funds are invested, tracked, and paid as pensions or lump sums at retirement. It shifts pension from a budgetary burden to a funded, individual account system.
States that Have Implemented CPS
Based on PenCom’s statements and reports, these are the states and FCT confirmed to be *fully implementing the Contributory Pension Scheme (CPS)*:
*Fully implementing CPS + FCT:*
1. Lagos
2. Kaduna
3. Delta
4. Ekiti
5. Osun
6. Edo
7. Jigawa
8. Federal Capital Territory, FCT
*What this means:*
- PenCom DG Omolola Oloworaran stated that out of 36 states with pension reform laws, only these 7 states plus the FCT are fully implementing them.
- These states remit contributions regularly, fund accrued rights, and have functional pension institutions running.
- The list matches PenCom’s website as cited in Vanguard.
*Note:* Some reports from earlier years listed Ondo and Anambra as compliant, but the most recent PenCom briefing in 2025 lists the 7 states above as fully implementing.
The other 23 states have laws but are inactive or only partially implementing, meaning workers there still face delays and uncertainty.
*Recommendations*
1. *Activate Existing Laws*: States with enacted laws must set up pension bureaus, open funding accounts, and begin remittances immediately.
2. *Phased Adoption*: PenCom recommends states start CPS for new employees and those with less than 10 years of service to reduce accrued rights burden.
3. *Technical Support*: PenCom should expand its consultative forums and technical assistance to help states bridge implementation gaps.
4. *Accountability*: States failing to remit should face sanctions, including interest on unpaid contributions and public disclosure, as PenCom has indicated.
5. *Peer Learning*: States already compliant like Lagos, Kaduna, Delta, Ekiti, Osun, Edo, and Jigawa should share models with lagging states.
*Conclusion*
Nigeria’s pension reform has built a solid legal and regulatory framework, but its promise depends on state-level action.
A law on paper does not pay a pension. Until the 23 lagging states activate their reforms, thousands of civil servants will retire into uncertainty while their counterparts in compliant states retire with dignity.
Pension reform is not optional—it is a constitutional duty and a test of fiscal responsibility.
The train is moving. States that delay risk getting hit by it.
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