The National Pension Commission (PenCom) has announced plans to increase statutory pension contribution rates as part of a broader review of the Pension Reform Act (PRA) 2014, a move aimed at strengthening retirement security for Nigerian workers.
Omolola Oloworaran, PenCom Director-General, disclosed this on Tuesday during the 2026 Pension Consultative Forum for States, the Federal Capital Territory (FCT), and Licensed Pension Fund Operators (LPFOs) in Lagos.
Under the current pension framework, employers contribute a minimum of 10% of an employee’s monthly emoluments, while employees contribute 8%, bringing total mandatory contributions to 18%. PenCom now wants that rate increased.
Oloworaran said the commission has begun discussions with organised labour, the National Assembly and other key stakeholders on proposed amendments to the pension law.
“We are having active conversations regarding the review of the Pension Reform Act with all necessary parties, including Labour and the National Assembly,” she said.
“It is still at the engagement stage. The rates of contribution will certainly go up, but we must ensure that all key stakeholders buy into it first.”
She explained that the proposed increase is intended to improve retirement income and ensure workers accumulate larger pension savings over the course of their careers.
The PenCom boss also expressed dissatisfaction with the slow adoption of the Contributory Pension Scheme (CPS) by state governments.
According to her, only eight of Nigeria’s 36 states are currently operating the CPS in compliance with the law.
“I am not satisfied at all with where we are. If you were to rate it, we still have an ‘F9′. We still have only eight states out of 36 states complying,” she said.
“There has to be more political will. Governors must prioritise their workers and their future when they retire—not just worry about today.”
To address concerns from non-compliant states about funding and operational challenges, PenCom is considering the creation of dedicated income streams for state pension bureaus.
Oloworaran said the commission had listened to the states’ concerns and would explore sustainable funding options, although the final structure may differ from the proposals submitted by the states.
The PenCom DG also condemned the practice of some state governments deducting pension contributions from workers’ salaries without remitting them into their Retirement Savings Accounts (RSAs).
“In my personal opinion, deducting funds from employees and putting them in a state account is something that should never happen,” she said.
She warned that such practices create the risk of pension funds being diverted by future administrations, leading to mounting pension liabilities and a broken retirement system.
PenCom said it would actively engage affected states to end the practice.
The reform discussions come as Nigeria’s pension industry continues to expand rapidly.
PenCom’s latest unaudited industry report shows that pension assets rose to a record N31.32 trillion in May 2026, up from N30.94 trillion in April.
The increase of N384.98 billion within one month represents a 1.23 per cent monthly growth, while total pension assets have grown by 29.5 per cent year-on-year from N24.18 trillion in May 2025.
The Pension Reform Act 2014 was enacted after a review of the 2004 pension law, which introduced the Contributory Pension Scheme and established PenCom as the regulator of Nigeria’s pension industry.
If implemented, the proposed increase in contribution rates would represent one of the most significant changes to Nigeria’s pension framework since the 2014 reforms, potentially boosting long-term retirement savings but also increasing payroll obligations for employers and workers.
