After 12 Years, Minimum Pension Guarantee Takes Off November 10 – PenCom

…Sets payment floor limit for low-income retirees

The National Pension Commission (PenCom) has said the long-awaited Minimum Pension Guarantee will start on November 10, ending a 12-year wait since it was enacted into law.

President Bola Ahmed Tinubu is expected to launch the guarantee on Tuesday, November 10, as part of a pension security initiative, if the programme goes ahead as planned. The initiative will also include PenCare, the pension health programme for retirees.

The director-general of PenCom, Ms Omolola Oloworaran, disclosed this on Thursday at the inaugural National Pension Week Leadership Summit in Abuja.

The initiative will include PenCare, the pension health programme, and the minimum pension guarantee.

“No Nigerian who has served and worked for this nation and has saved for retirement should grow old in want,” she said.

“That promise will not wait another twelve years”

Oloworaran said Sections 82 and 84 of the Pension Reform Act 2014 had promised a minimum pension guarantee for 12 years, but it has not been delivered.

“That promise will not wait another twelve years,” she said.

She said retirees would see the difference from the day the programme starts.

“From that day, pensions in Nigeria will have a floor,” she said. “And for our poorest retirees, old age will no longer mean choosing between medicine and food.”

The DG did not give the amount of the guarantee, the eligibility rules or how it will be paid.

President Tinubu, speaking at the summit, said his administration would honour the minimum pension guarantee provision of the Pension Reform Act 2014.

Represented by the Secretary to the Government of the Federation, Senator George Akume, Tinubu said the promise had never been implemented since the law was enacted.

“Since enactment, that promise has never been honoured. Under President Tinubu, it will be,” the SGF said on behalf of the President.

He said the President viewed pension as a national obligation and not a favour.

“A pension is not a favour granted by Government. It is a wage earned, deferred and held in trust. It is a promise. And this Administration has resolved that the promise will be kept,” the President said.

The President also announced the launch of PenCare, a national retiree wellbeing programme.

The president said it would begin by giving low-income retirees access to essential healthcare. He described the move as a shift from a system that merely holds savings to one that guarantees a floor of dignity.

N758bn bond

President Tinubu said he inherited pension obligations that had been deferred for too long, with retirees waiting for years to receive their accrued rights.

He said he approved the N758 billion federal government Pension Bond to settle accrued pension rights and strengthen the Pension Protection Fund.

“That was not an accounting exercise. It was an act of restitution to Nigerians who served their country and were made to wait for what they had earned,” the President said.

The President charged PenCom to remain firm, fair and forward-looking, and to enforce the law “without fear or favour.”

President Tinubu said: “To deduct a worker’s contribution and fail to remit it is not an administrative lapse. It is a breach of trust.”

The President backed the push beyond the formal sector. He said traders, artisans, farmers, transport workers and millions of self-employed Nigerians deserve a realistic path to a secure old age.

“Pensions for All must mean exactly that: all,” he said.

“Preservation without growth is a slow erosion. Retirement savings that fail to keep pace with inflation quietly betray the very people who saved them,” he said.

The President called on state governments, organised labour and other stakeholders to expand coverage and improve compliance. He said the summit must not end in speeches but in measurable commitments.

“The true measure of our success will not be how much money the system holds. It will be how much security, and how much dignity, it delivers,” he said.

“Above all, no Nigerian who has served this nation will be forgotten in retirement,” the President said.

Private sector told to share the burden

Oloworaran said the private sector should help carry the cost of the guarantee. She said the pension industry was already contributing.

“It is time for the private sector to join them, so that the minimum pension guarantee rests on the shoulders of all who benefit from the labour of Nigerian workers, and not on the public purse alone,” she said.

She urged employers to support the Pension Protection Fund.

“The people who built your profits will grow old. Let them grow old with dignity, because no business should be built on the poverty of the people who built it,” she said.

The DG said almost 70 per cent of private-sector employees end up with pensions below the national minimum wage. She added that more than 55 per cent of all retirees on pensions below the minimum wage come from the private sector.

She blamed part of the problem on the practice of calculating pension contributions on a small part of a worker’s pay.

She said the law requires a combined contribution of 18 per cent of pay, made up of 10 per cent from the employer and eight per cent from the employee. She said Australia’s 12 per cent, which is lower, is charged on workers’ entire earnings, while Nigeria’s is charged on pensionable earnings alone.

“A worker can earn a decent wage and still retire on a pension calculated from just a fraction of it,” she said.

“Contribute on the real wage, not the smallest base your accountant can defend,” she told employers.

Employers warned on unremitted contributions

Both Oloworaran and the President warned employers who deduct pension contributions but fail to remit them.

“That is not an administrative lapse, it is a tear from the future of a Nigerian family. And the commission will treat it exactly as such,” the DG said.

Oloworaran said PenCom would use every power in the Pension Reform Act to recover what is owed to workers. She added that enforcement alone had never built a culture of compliance.

The DG said nine more Nigerians stand outside the pension scheme for every one inside it.

“A pension system that covers only the payroll is not a national pension system. It is a privileged pension system,” she said.

She said PenCom would reach informal workers through the Personal Pension Plan, accredited pension agents and digital onboarding. She said the industry had agreed to open three million additional funded and active accounts within one year.

“Not registrations, three million funded active accounts, new accounts. Because an empty account is a statistic, but a funded account is a future,” she said.

Oloworaran told pension operators to deliver returns that protect workers’ savings from rising prices.

“Beating inflation is not an aspiration, it is your job,” she said.

The DG said PFAs and custodians must complete recapitalisation by June 30, 2027. “We are not changing our minds,” she said.

She said pension assets grew from N20.79tn in July 2024 to N31.8tn by the end of August 2026. She said the growth must now translate into better retirement security.

Oloworaran said the reform would be judged by how many Nigerians it protects.

“The next great reform in Nigeria will not be measured by how much money we manage. It will be measured by how many Nigerians we protect,” she said.