Pension reform: Securing the future for our senior citizens

A nation is often judged by the quality of life it affords its elderly citizens. In developed societies, this is measured by access to healthcare, decent accommodation, and dignity in retirement. In Nigeria, however, this remains a pressing challenge. After years of dedicated service in the public or private sector, many retirees face uncertainty rather than comfort. Securing their future depends on the strength of our pension reform structures and the seriousness with which we implement them.

The reality is that Nigeria’s pension system still needs a comprehensive overhaul. Reforming pension administration is not a luxury; it is a necessity if we are to align with present-day realities and guarantee long-term sustainability. To chart the way forward, we must critically examine the regulatory frameworks guiding the sector and ask whether they are sufficient to safeguard the welfare of contributors and beneficiaries alike.

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Pension regulatory frameworks

Pension regulation in Nigeria requires strict compliance with a set of laws, codes, and guidelines designed to ensure accountability, transparency, and the protection of contributors’ funds. The ecosystem involves Pension Fund Administrators (PFAs), custodians, regulators, and government oversight.

Some of the key frameworks include:

Companies and Allied Matters Act (CAMA) 2020 (as amended): This law regulates corporate entities in Nigeria, including PFAs, which must operate within its provisions to ensure proper governance and accountability.

Pension Reform Act (PRA) 2014 (as amended): The bedrock of Nigeria’s contributory pension scheme, the PRA requires employers to contribute a minimum of 10% of employees’ monthly earnings, while employees contribute 8%. These funds are channelled into Retirement Savings Accounts (RSAs), providing a safety net for workers in retirement.

PFA Guidelines: Issued by the National Pension Commission (PenCom), these guidelines direct how PFAs manage assets, disburse payments, and invest contributions. Their core aim is to guarantee both returns and the safety of pension funds.

Money Laundering (Prohibition) Act 2011 (as amended): This law ensures PFAs do not become conduits for illicit financial flows, reinforcing transparency in pension management.

PenCom Rules and Corporate Governance Guidelines: PenCom serves as the chief regulator, issuing policies to promote accountability and best practices in the sector. The 2021 Corporate Governance Code for Pension Business, for instance, outlines principles to enhance public trust, transparency, and efficiency.

Nigerian Code of Corporate Governance (2018): Issued by the Financial Reporting Council of Nigeria, this code provides overarching guidance on how Nigerian corporations should be governed in the interest of all stakeholders, including pension contributors.

These frameworks, collectively, are intended to protect pension assets, ensure compliance, and build a culture of transparency. However, their effectiveness depends on strict enforcement and the ethical conduct of PFAs.

Ethics, responsibility, and oversight

Beyond regulation, fiduciary ethics must remain central. Pension managers must uphold integrity in financial reporting, safeguard contributors’ information, and fulfil service promises without compromise. Issues such as conflicts of interest between PFAs and custodians, lapses in corporate social responsibility (CSR), and inadequate due diligence must be addressed firmly.

For example, separating the roles of pension fund managers from custodians is not a mere formality; it is a safeguard against misuse of funds. Similarly, CSR should not be seen as an optional add-on but as an essential obligation, given the social impact of pension management.

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The way forward

Nigeria’s over-reliance on oil revenues has long left its economy vulnerable. By contrast, a well-regulated, trustworthy pension system has the potential to channel long-term funds into national development while simultaneously protecting the welfare of retirees. If managed properly, pension assets can become a source of economic stability, fuelling infrastructure, housing, and other critical sectors.

But reforms must go deeper than technical adjustments. The government must show an unwavering commitment to the welfare of senior citizens. This includes ensuring prompt payment of pensions, strict oversight of PFAs, and sanctions for misconduct. Equally, civil society and the media must demand accountability so that pensioners are not left at the mercy of inefficiency or corruption.

Conclusion

As Nigeria marks its 65th Independence anniversary, we must recognise that the true measure of freedom lies not only in political sovereignty but in how we treat those who laboured to build the nation. The happiness and dignity of our retirees should be a national priority.

Securing their future is not just about compliance with laws and codes; it is about reaffirming our values as a people. If we fail our senior citizens, we fail ourselves. But if we protect their welfare, we reinforce the foundation of trust and responsibility upon which a stronger, fairer Nigeria can be built.

 

Dr Kingsley Ndubueze Ayozie, FCTI, FCA, is a public affairs analyst and chartered accountant. He writes from Lagos.