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LAGOS, Nigeria - The National Pension Commission (PenCom) has urged Governor Babajide Sanwo-Olu of Lagos State to expand the range of periodic pension increases for retirees enrolled in the Defined Benefit Scheme (DBS).
PenCom is advocating for this benefit to also apply to pensioners under the Contributory Pension Scheme (CPS) in the state.
During a courtesy visit to the governor at the Lagos State Government House, Ms. Omolola Oloworaran, the Director-General of PenCom, emphasized that this change would enhance the monthly income of pensioners.
The visit aimed to present the findings from PenCom’s 2024 routine inspection of the Lagos State Pension Commission (LASPEC) and to express gratitude to the governor for agreeing to be the Special Guest at the upcoming Pension Industry Leadership Retreat starting May 8.
Oloworaran pointed out that only retirees from the DBS currently benefit from pension increases in Lagos State, while those under the CPS have been overlooked.
She stressed the need to prioritize CPS retirees, noting the contributory aspect of their scheme, and commended Lagos State for being a leading example nationwide in the effective management of the CPS.
She highlighted significant achievements, such as the consistent deductions and remittance of employee contributions to their Retirement Savings Accounts (RSAs), the full settlement of all arrears of accrued pension rights, a valid Group Life Insurance Policy for many public service employees, and the use of advanced ICT systems to improve pension administration in Lagos State.
Despite these advancements, the PenCom DG suggested a partnership with Lagos State to mandate the Pension Clearance Certificate (PCC) for companies seeking government contracts and services, emulating the federal government's practice.
She proposed transitioning unremitted contributions currently held in commercial banks' escrow accounts into Transitional Contribution Fund (TCF) accounts managed by Pension Fund Administrators (PFAs) to enhance investment returns.
Additionally, she advised the state government to establish an Irrevocable Standing Payment Order (ISPO) for automatic deductions and remittances of pension contributions from Federation Account Allocation Committee (FAAC) allocations to safeguard against administrative delays.
Oloworaran commended the state's N600 million bailout for unpaid accrued rights of retirees from the Lagos State University of Education (LASUED) and called for further measures to resolve unpaid benefits from 2023 and 2024.
She also encouraged the governor to think about implementing the Minimum Pension Guarantee (MPG), akin to the mandatory CPS level.
Oloworaran informed Sanwo-Olu that the federal government has begun its MPG contributions and included it in the recent approval for a N758 billion bond to address pension liabilities.
In response, Sanwo-Olu reaffirmed the state's dedication to pension reforms and praised the cooperation with PenCom under its current leadership.
The governor expressed support for pension increases for CPS retirees while underscoring the significance of workers’ welfare in his administration's agenda.
He conveyed confidence in the sustainability of reforms by future administrations, remarking that an ISPO might not be required at this stage.
Sanwo-Olu also urged PenCom to assist Lagos State's developmental projects by promoting pension fund investments in government-issued bonds.
