State governments must contribute to the N400bn Pension Protection Fund before their retirees can benefit from the newly introduced N52,500 minimum monthly pension, the National Pension Commission has said.
PenCom Director-General, Omolola Oloworaran, disclosed this while providing details of the Presidential Pension Security Initiative in Abuja, explaining that the requirement was necessary to ensure the sustainability of the scheme.
She said the minimum pension guarantee covered eligible retirees in the federal public service, state governments and the private sector, but states must contribute to the fund to qualify their pensioners.
Oloworaran warned that failure to ensure regular contributions could undermine the initiative and leave it unable to sustain payments to beneficiaries in the coming years.
“We are making it a requirement that states must contribute to the Pension Protection Fund before they can be eligible for the minimum pension.
“If people are not contributing, we’ll run out of funds, and we can’t start a laudable initiative like this, and then five or 10 years from now somebody says it has stopped working because people are not contributing,” she said.
President Bola Tinubu formally activated the minimum pension guarantee, which sets N52,500 as the minimum monthly pension for eligible retirees under the Contributory Pension Scheme.
The initiative is expected to benefit 173,209 retirees whose monthly pensions are below the approved threshold, with funding provided by the government and the pension industry through the Pension Protection Fund.
Pension fund assets rise to N31.8trn in August — PenCom
Oloworaran said eligible retirees receiving less than N52,500 monthly would have their pensions augmented to meet the approved minimum.
“Every eligible retiree who is below N52,500 will be augmented to N52,500. There is no discrimination,” she said.
She clarified that the contribution requirement applied specifically to state governments seeking to extend the benefit to their retirees, while eligible federal and private-sector pensioners were also covered under the initiative.
According to the breakdown presented at the launch, private-sector retirees account for 54 per cent of the 173,209 beneficiaries, while federal public service retirees make up 34 per cent and state retirees account for 12 per cent.
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