N8.7tn pension fund: PenCom bars PFAs from investing in bonds issued by nine states

National Pension Commission



The National Pension Commission has barred  pension fund administrators from investing in the bonds of nine states that have yet to amend their state pension laws and join the Contributory Pension Scheme.


Findings also revealed that this restriction might be extended to 15 other states that had joined the CPS, but were not showing full commitment to funding the Retirement Savings Accounts of their workers.

Latest figures from the commission showed  that as of March 2019, the number of states that had enacted laws on the CPS stood at 27.



 Yobe State is  still operating the old Defined Benefits Scheme and has  taken no action towards adopting the CPS.

Six states,  Katsina, Bauchi, Borno, Benue, Kwara and Pateau have drafted bills, while in Akwa Ibom and Cross River,  the bills are still in the houses of assembly.

The commission stated that the states that had commenced remittance of pensions to  workers’ Retirement Savings Accounts and were funding their accrued  rights were Lagos, Ogun, Kaduna, Niger, Delta, Osun and Rivers.

The CPS was established under the Pension Reform Act to replace the DBS.

This was because the DBS had huge liabilities, which were not being funded, leading to situations where retirees endured long waits to get their entitlements, while many of them died without being paid.

Unfortunately, the same scenario, which was  prevalent in states operating the DBS,  is now happening  in  the states operating the CPS due to poor funding of the scheme.

The Head, Corporate Communications, PenCom, Peter Aghahowa, said the commission could not impose the CPS on the states, but could only use moral suasion.

He said, “The states have to enact the laws to do the CPS because they are going to operate based on the provisions of the laws. We can only encourage them because of the benefits in the scheme.”



According to him, if any state plans to raise funds through pension bonds, it must have met the CPS criteria before it could have access to such.

For now, he said, those that had not enacted the laws were being encouraged to do so.

He said “We don’t invest in  bonds  of states that have not enacted their laws. We have some that are not complying properly, some are complying partially. I believe we will review some of those things again. But for now, if you have not even enacted any law, don’t think we will start investing in your bonds.”

Pensioners lament agonies, labour seeks review

Retirees under the CPS have lamented their ordeal as state governments, which have started the scheme continue to falter in remitting contributions to the pension fund administrators

The PUNCH’s investigations showed that most of the states that had passed the law had not been remitting government and workers’ contributions to  the Retirement Savings Accounts.

Delta: Retirees wait for six years

In Delta State, beneficiaries of the CPS said many of them spent over six years after retirement before being paid their entitlements.

But the state government said although the scheme started shakily, the Governor Ifeanyi Okowa-led government was gradually righting the wrong of the past.

Some of the contributors, who spoke with our correspondents, lamented the delay in process, adding that many of the retirees died before the payment of their entitlements.

They also accused officials of the pension fund administrators of also deliberately delaying payment into retirees’ accounts when the state government had released funds to them.

A retiree, Mr Anthony Osanekwu, lamented that he had not been paid his harmonised pension.

Osanekwu, who said he retired as a ‘functioning director’ in 2012, lamented, “We that are in the Contributory Pension Scheme have been suffering. The promises have been on without fulfilment.

“In the same situation, they have not paid the harmonised pension which is the main thing. They just pay something.

“In fact, one of us died two weeks ago and he was buried last week in Asaba here. He retired as a director in higher education. So people, who retired at that level, have been suffering for over five years.”

Similarly, another pensioner and   member of the state Association of Contributory Retirees, Mr G. O. Aduwa, confirmed that he got his payment three years after retirement.

Aduwa, who left the state public service in 2014, criticised the manner the  government was operating the scheme. He said he was worried that the government that enacted the pension law did not abide by it.

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