The National Pension Commission has announced that state governments are required to make contributions to the N400bn Pension Protection Fund to enable their retired workers to qualify for the newly established N52,500 minimum monthly pension.
PenCom Director-General, Omolola Oloworaran, disclosed this while providing details of the Presidential Pension Security Initiative in Abuja.
She said the minimum pension guarantee covers eligible retirees in the federal public service, state governments and private sector, but states must contribute to the fund to qualify their retirees for the benefit.
She said the requirement is to ensure the sustainability of the scheme and prevent the fund from running out of money as more retirees are enrolled.
“We are making it a requirement that states must contribute to the Pension Protection Fund before they can be eligible for the minimum pension.
“If people are not contributing, we’ll run out of funds, and we can’t start a laudable initiative like this, and then five or 10 years from now somebody says it has stopped working because people are not contributing,” she said.
President Bola Tinubu formally activated the minimum pension guarantee, which sets N52,500 as the minimum monthly pension for eligible retirees under the Contributory Pension Scheme (CPS).
The initiative is expected to benefit 173,209 retirees whose monthly pensions are below the approved threshold, with funding from the government and pension industry through the Pension Protection Fund.
Oloworaran said every eligible retiree under the CPS earning below N52,500 would receive an adjustment to bring their monthly pension to the approved minimum.
“Every eligible retiree who is below N52,500 will be augmented to N52,500. There is no discrimination,” she said.
She clarified that the contribution requirement applies to state governments seeking to extend the benefit to their retirees, while eligible federal and private-sector pensioners are also covered.
According to the breakdown presented at the launch, private-sector retirees account for 54 per cent of the 173,209 beneficiaries, while federal public service retirees make up 34 per cent and state retirees 12 per cent.
What You Should Know
The federal government recently introduced a N52,500 minimum monthly pension for eligible retirees under the Contributory Pension Scheme, aiming to lift over 173,000 vulnerable pensioners above poverty levels. However, PenCom has made state-level contributions to a central protection fund mandatory so that the initiative remains sustainable over the long term.
- Positive Impact: Retirees earning below the threshold will receive a guaranteed monthly income boost to help cope with inflation and rising living costs.
- Potential Concerns: Financially strained state governments may delay or struggle to make the required fund contributions, leaving their local retirees waiting longer to enjoy the benefit.
