Pensions, PenCom, and the Pension Reform Act 2004

Due to the problems which had existed in the Nigerian pension system including lack of reliable records of pensioners, huge amount of resources on what became yearly verification exercises that did not address efficient pension payment, the pension reform act (Pension Reform Act 2004) was enacted in 2004 by the Obasanjo administration.

This was to address and eliminate the problems associated with the pension scheme. The enactment of the act ushered in a Contributory Pension Scheme (CPS) that is fully funded, privately managed and based on individual accounts for both the public and private sector employees in Nigeria. The Act also established the National Pension Commission (PenCom) as the sole regulator and supervisor of all pension matters in the country.

PenCom Logo
PenCom Logo

“I had some doubt when I started using one of the Pension Fund Administrators (PFA) for my pension scheme but so far, I will say I am really impressed by the promptness of my PFA in the payment of both my gratuity and my monthly pension,” Agnes Eboh, a recently retired private sector employee said.

Just like Mr. Ochidi, part of Mrs. Eboh’s fear was getting her gratuity paid on time due to past experience but both expressed satisfaction with the smooth and rigorous free verification exercise for their gratuity and pensions to be paid. “I will encourage all employers in this country to enrol their workers to help them when they retire like me,” Mrs Eboh stated.