Lagos Pension Crisis: What PenCom Is Doing After Retirees’ Protest
Kehinde Adeleye
The National Pension Commission, PenCom, has stepped into the growing dispute over pension adjustments and unpaid benefits involving retirees under the Contributory Pension Scheme in Lagos State, following protests by pensioners demanding action from the government.
The regulator said it has opened high level discussions with the Lagos State Government and the Lagos State Pension Commission, LASPEC, to address concerns over the implementation of pension increments, approved wage awards and outstanding benefits owed to eligible retirees.
The intervention followed demonstrations by members of the Nigeria Union of Pensioners and retirees under the CPS sector around Lagos House, Ikeja. The protesters demanded the implementation of consequential pension adjustments, payment of wage awards and settlement of outstanding arrears.
PenCom, in a statement, acknowledged the concerns raised by the retirees and said it understood the hardship caused by delays in implementing approved adjustments.
The Commission said it had engaged the Lagos State Government and LASPEC on issues relating to pension administration under the CPS, including the extension of appropriate pension adjustments to eligible retirees.
However, PenCom explained that pension adjustments under the CPS are not as straightforward as payments under the old Defined Benefits Scheme.
According to the regulator, the process requires determining which retirees are eligible, calculating the actuarial liabilities involved, securing the required funding and issuing operational guidelines to Pension Fund Administrators, PFAs.
The Commission said it was therefore working with the Lagos State Government, LASPEC, PFAs and representatives of the retirees to develop a transparent, orderly and sustainable solution.
Why the Pension Adjustment Is Taking Time
One of the major issues behind the dispute is the difference between the old pension system and the CPS.
Under the former Defined Benefits Scheme, pension increases could be paid directly from government funds. Under the CPS, however, adjustments require additional funding into retirees’ Retirement Savings Accounts and actuarial calculations to determine the financial implications.
This process is intended to ensure that pension adjustments do not undermine the sustainability of the pension funds managed by PFAs.
Despite the current dispute, Lagos remains one of the states with a strong record of meeting its obligations under the CPS.
Figures from LASPEC show that the Lagos State Government has paid a cumulative N168.2 billion in accrued rights to more than 48,000 retirees since the scheme began in 2007.
Under Governor Babajide Sanwo Olu, the state has reportedly paid more than N92 billion in accrued rights to over 25,000 retirees between May 2019 and mid 2026.
The state also made a N5 billion single batch payment in July 2024 as part of efforts to reduce outstanding liabilities.
Accrued rights refer to pension and gratuity benefits earned by workers who were already in government service before Lagos fully transitioned to the CPS in 2007.
PenCom’s Next Step
PenCom said it would continue discussions with the Lagos State Government and other stakeholders to resolve the concerns surrounding pension adjustments and ensure eligible retirees receive their legitimate entitlements.
The Commission also reaffirmed its responsibility to enforce the provisions of the Pension Reform Act 2014 and ensure compliance across the pension industry.
For Lagos retirees currently demanding action, the key issue is now whether the ongoing engagement between PenCom, LASPEC and the state government will result in a clear timeline for the payment of the outstanding adjustments and wage awards.
