By Bimbola Oyesola, [email protected]
The National Pension Commission (PenCom) has charged the Lagos State Governor, Babajide Sanwo-Olu, to consider periodic pension increases for retirees under the Contributory Pension Scheme (CPS) to boost their monthly pensions as currently enjoyed by those under the Defined Benefit Scheme (DBS).
Director-general of PenCom, Ms. Omolola Oloworaran, made the request during a courtesy visit to Governor Sanwo-Olu at the Lagos State Government House. The visit was to present the report of PenCom’s 2024 routine inspection of the Lagos State Pension Commission (LASPEC).
The DG also used the opportunity to thank the governor for confirming his participation as special guest at the Pension Industry Leadership Retreat.
The PenCom DG pointed out that currently, only the DBS retirees are paid pension increases in Lagos State, leaving out their counterparts under the CPS.
She made a case for the prioritisation of retirees under the CPS given the contributory nature of the scheme.
Ms. Oloworaran lauded Lagos State as a leading model in the Federation for its effective implementation of the CPS.
She highlighted key achievements, including consistent deduction and remittance of employee contributions to their Retirement Savings Accounts (RSAs), full settlement of all backlog of accrued pension rights, the existence of a valid Group Life Insurance Policy for most public service employees, and the deployment of advanced ICT systems to enhance pension administration in Lagos State.
Despite this progress, PenCom DG proposed a partnership with Lagos State to make the Pension Clearance Certificate (PCC) a mandatory requirement for companies seeking Lagos State Government contracts and services, as practiced at the federal level.
In addition, the DG recommended transitioning unremitted contributions currently held in commercial banks’ escrow accounts into Transitional Contribution Fund (TCF) accounts managed by Pension Fund Administrators (PFAs), to optimise investment returns.
She also advised Lagos State to implement an Irrevocable Standing Payment Order (ISPO) for pension contributions to be automatically deducted and remitted from Federation Account Allocation Committee (FAAC) allocations. This is to protect pension remittances from potential administrative delays.
While commending the State for its N600 million bailout for outstanding accrued rights of Lagos State University of Education (LASUED) retirees, PenCom DG appealed for further intervention to address unpaid benefits from 2023 and 2024.
The DG also urged the Governor to consider implementing the Minimum Pension Guarantee (MPG), similar to what obtains at the mandatory CPS level.
She informed the Governor that the Federal Government had started its MPG contributions and included it in the recent approval to issue the N758 billion bond to clear pension liabilities.
In response, Governor Sanwo-Olu reaffirmed the State’s commitment to pension reforms and praised the collaborative relationship with PenCom under the current leadership.
The Governor expressed support for implementing pension increases for CPS retirees.
He expressed the importance of workers’ welfare in his administration’s agenda.
While he was optimistic about the sustainability of reforms by future administrations, he noted that an ISPO may not be necessary at this time.
The Governor also called on PenCom to support Lagos State’s developmental initiatives by encouraging pension fund investments in government-issued bonds.
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