The history of pension fund administration in Nigeria dates back to the colonial era, and it started with the 1951 Pension Ordinance by the British colonial administration. The ordinance, which had a retroactive effect from 1946, was applied to United Kingdom officials posted to Nigeria.
Before the introduction of the Contributory Pension Scheme (CPS), Nigeria operated a Defined Benefit (DB) scheme, which was plagued by problems like insufficient budget allocations, leading to delays in pension payments to retirees.
The Pension Reform Act of 2004 introduced the Contributory Pension Scheme. This law revolutionised pension administration in Nigeria by making pensions more sustainable through joint contributions from employees and employers to a Retirement Savings Account (RSA).
One of the key features of the CPS is joint contributions, which initially allowed minimum combined contributions of 15 per cent of an employee’s monthly earnings, and later increased to 18 per cent in the 2014 amendment.
Another key feature of the CPS is regulation, as the National Pension Commission (PenCom) has the statutory mandate to oversee the scheme with a view to ensuring that pensioners receive retirement benefits as and when due.
Though the CPS has transformed pension administration in Nigeria by providing financial security to millions and contributing to the economy, only Lagos, Edo, Delta, Kaduna, Ekiti, Osun and Jigawa States, as well as the Federal Capital Territory (FCT), are fully implementing the scheme in Nigeria.
In Delta State, there are arrears of pension owed to retirees in the state contributory pension scheme, which were inherited by the Rt. Hon. Sheriff Oborevwori’s administration is from the previous administrations in the state. In his sincere determination to bring succour to retirees in the state, Governor Oborevwori recently approved the release of N10 billion for the payment of backlog arrears of pensions.
Governor Oborevwori approved at a meeting with the Chairman, Bureau for State Pension, Sir Edwin Ogidi-Gbegbaje; Secretary of the Bureau, Comrade Lawson Efenudu; State Chairman, Association of Contributory Retirees, Comrade Anthony Osanekwu and State Secretary of the Association, Mr. Joseph Okproma, as well as other top government officials in his office at Government House, Asaba.
Speaking at the meeting, the Governor emphasised that the N10 billion was to settle the accumulated backlog of pension arrears owed to retirees of the state contributory pension scheme before he assumed office on May 29, 2023. He disclosed that his administration has never defaulted in fulfilling its pension obligation, adding that it (his administration) has been releasing N1.4 billion monthly since he assumed office on May 29, 2023.
Giving a breakdown of the money, the Governor said N500 million was for the settlement of accrued rights; N500 million for the serving civil servants as the employer’s 10 per cent contribution and N400 million for the retirees in the old pension scheme, which, he said, amounted to a total of N1.4 billion monthly.
According to him, his administration paid N9.8 billion from June 2023 to December 2023; N16.8 billion throughout 2024 and N9.8 billion from January 2025 to date, adding that a cumulative sum of N36.4 billion has been paid since his administration came on board.
“As a listening governor, I have called this meeting to enable us to harmonise the government’s responsibilities to our retirees, such as the backlogs of arrears before I came in, because I have not failed to release money for payment of pension every month.
“There are a few states that release N1.4 billion every month for pension. And that excludes our wage bill of about N16 billion every month. We are also constructing roads and other infrastructures, paying contractors and other human capital development, without borrowing a dime.
‘’I also feel that our people should be happy, both retirees and others. I have approved the release of the sum of N10 billion for the payment of the backlog of arrears owed to state pensioners.
“So, I want the Chairman, Bureau for State Pension; the Secretary of the Bureau; the SSG; the Chairman and Secretary of the Association of Pensioners; the Head of Service and the Commissioner for Finance to supervise the implementation of the N10 billion to ensure that the people (pensioners) get their money.
“This is because I am here to serve the people. You people elected me, and I want everybody to be happy. I will always do the needful. What is more important is that when you are serving a state like Delta State, you must learn to manage all the ethnic nationalities, the civil servants, the pensioners and everybody,” he said.
In his remark, the Chairman of the Bureau for State Pension, Sir Edwin Ogidi-Gbegbaje, said the approval by the Governor came to the Bureau as a pleasant surprise, pointing out that the Governor’s approval would serve as a huge relief to retirees in the state.
He assured that every Kobo that has been approved would be used exclusively for the payment of retirees’ benefits, stressing that the system had been programmed in such a way that one cannot tamper with pensioners’ funds.
“The announcement of the approval by the Governor came to us as a pleasant, huge surprise. We were not even contemplating that sum for now, we felt, because of competing needs that the state government may not be able to do that huge amount, but it took everybody by surprise. Certainly, it would come as a huge relief to our retirees.
“We always ensure that pensioners’ funds are not tampered with. So, the impression that there would be reservations as to how the funds would be expended is not going to be an issue at all. Every Kobo that has been approved will be used exclusively for the payment of retirees’ benefits. I want to assure you of that.
“The system is programmed in such a way that you cannot tamper with pensioners’ funds. The payment process is very clear. In fact, PENCOM has introduced two innovations to make the payment of retirees’ remittances as transparent as possible.
“We have the new format introduced by the Central Bank of Nigeria (CBN) as approved by PENCOM. We also have a new remittance system that took off about a month ago, where we now have what we call some companies that have been approved by PENCOM for the remittances of pensioners’ benefits. And all these things I am explaining are done electronically.
“So, there is just no way that the funds that have been given to the state Bureau for Pensions for the payment of pensioners could be used for any purpose other than for the payment of pensioners’ benefits. These backlogs are from successive administrations, as the present administration is not owing in any way,” Ogidi-Gbegbaje explained.
Responding, the Chairman, Association of Contributory Retirees in the state, Mr. Anthony Osanekwu, who was visibly elated over the development, expressed appreciation to the governor for the approval. He said the Governor took them unawares, as what they were expecting was far less than the N10 billion, adding that pensioners in the state would be excited by the time they hear the news of the governor’s magnanimous approval.
“You took us unawares; what we have been expecting is far less than the N10 billion you just approved for the payment of backlogs of arrears pension owed retirees in the state contributory pension scheme. I am elated, and I know that when this news gets to pensioners in the state, they will all be very happy about it. I thank you for this wonderful gesture,” Mr. Osanekwu added.
