By Victor Ahiuma-Young

The National Pension Commission (PenCom) has called on Lagos State Governor, Babajide Sanwo-Olu, to extend periodic pension increases to retirees under the Contributory Pension Scheme (CPS), ensuring parity with those on the Defined Benefit Scheme (DBS).

During a courtesy visit to the Lagos State Governor, PenCom’s Director General, Ms. Omolola Oloworaran, presented the commission’s 2024 inspection report of the Lagos State Pension Commission, LASPEC.

Ms. Oloworaran highlighted that while Lagos DBS retirees currently benefit from periodic pension adjustments, CPS retirees are excluded. 

She urged the state to prioritise this category, given the contributory nature of their pension scheme.

The Director General lauded Lagos State for its exemplary implementation of the CPS, citing achievements such as consistent remittances to Retirement Savings Accounts (RSAs), the full clearance of accrued pension arrears, operational Group Life Insurance coverage for public servants, and advanced ICT integration in pension administration.

Despite these successes, she proposed further enhancements, including adopting the Pension Clearance Certificate (PCC) as a prerequisite for businesses seeking state contracts—mirroring federal practices. She also recommended transferring unremitted contributions from commercial bank escrow accounts to Transitional Contribution Fund (TCF) accounts managed by Pension Fund Administrators (PFAs) to maximise investment returns.

Additionally, Ms. Oloworaran advocated for an Irrevocable Standing Payment Order (ISPO) to automate pension deductions from Lagos State’s federal allocations, helping to avoid delays in remittances. She praised the state’s N600 million intervention for Lagos State University of Education (LASUED) retirees but requested further action to settle outstanding benefits from 2023 and 2024.

A key point in her appeal was for the implementation of the Minimum Pension Guarantee, MPG) in Lagos, as already initiated by the Federal Government, which recently approved a N758 billion bond to clear pension backlogs, including MPG contributions.

Responding, Governor Sanwo-Olu reaffirmed his administration’s commitment to pension reform and welcomed the idea of pension increases for CPS retirees. While he expressed confidence in the reforms’ sustainability beyond his tenure, he said the implementation of an ISPO might not be necessary at this stage.

The Governor also encouraged PenCom to support Lagos State’s development by promoting pension fund investment in state-issued bonds.