By: Oluwaseun Akanji.
The National Pension Commission (PenCom) has described the 2004 pension reform as one of the most significant and enduring transformations in Nigeria’s financial sector, noting that it has been sustained and deepened by successive administrations.
The Head of Corporate Communications at PenCom, Mr. Ibrahim Buwai, stated this at the 36th Annual Conference of the Finance Correspondents Association of Nigeria (FICAN), held at the weekend in Lagos.
The conference, themed “Building on the Gains of Recapitalisation, Tax Reforms and the Fintech Revolution,” brought together financial journalists, regulators, policymakers and other stakeholders to review developments shaping Nigeria’s financial and economic landscape.
Buwai said the reform, which commenced in 2004, has remained one of the most sustained in the financial sector, despite challenges, particularly delays in the payment of pension obligations in the public sector.
“Since 2004, when Nigeria embarked on pension reform, to the present administration, the reform has been sustained and deepened. It is one of the enduring reforms in the financial sector. However, we have also encountered challenges relating to delayed payments in the public sector,” he said.
According to him, the pension sector has recorded a significant turnaround, moving from deficit to surplus, while the Federal Government has made substantial progress in settling accrued pension rights of retiring public servants.
Buwai disclosed that the Federal Government is currently 41 months ahead in the payment of accrued rights, meaning liabilities for employees due to retire up to December 2029 have been provided for.
“Today, we are 41 months in surplus. This means we have paid the accrued pension rights of Federal Government employees due to retire up to December 2029,” he said.
He identified the recent payment of additional benefits to retired federal civil servants as another key milestone.
Buwai explained that the Contributory Pension Scheme (CPS) did not abolish gratuity and does not prevent employers from granting additional retirement benefits.
He cited Section 4 of the Pension Reform Act, which provides for additional benefits where employers are able and willing to provide them in accordance with the law.
According to him, the Federal Government recently paid about N1.1 billion in additional exit benefits to 175 retired civil servants who worked in treasury-funded Ministries, Departments and Agencies (MDAs) and retired between January 1 and August 31, 2026.
“The pension scheme has not taken away gratuity. Section 4 of the Pension Reform Act makes ample provision for additional benefits, as long as employers are able to provide them,” Buwai said.
He urged private-sector employers to emulate the Federal Government by considering additional retirement benefits for their workers, in recognition of years of service and contribution to organisational growth.
Such measures, he said, would complement the formal pension system and strengthen retirement security for Nigerian workers.
Buwai also stressed the need for sustained reforms and responsible management of pension funds, noting that gains in the sector must be consolidated through effective regulation, timely remittances and improved compliance by employers.
His comments came against the backdrop of broader reforms in the financial sector, including banking recapitalisation, tax reforms and the rapid expansion of financial technology — all central to discussions at the FICAN conference.
The pension reform, introduced in 2004 to replace the largely unfunded and unsustainable defined-benefit arrangement with a contributory system, has since become a major component of Nigeria’s financial architecture.
