Nigeria’s pension crisis: Two decades of betrayal, broken promises by state govts

Report by Ivo Takor, mni Vice Chairman/Chairman, Human Rights Committee, Nigerian Bar Association (NBA) Epe Branch.

Introduction
THE RIGHT to pension for employees in states public service is constitutionally guaranteed. The 1999 Constitution of the Federal Republic of Nigeria (as amended) provides a firm legal foundation for this entitlement. Specifically, Section 210(1) stipulates that, subject to subsection (2), the right of a person in the public service of a state to receive pension or gratuity shall be regulated by law. Furthermore, subsection (2) ensures that any such entitlement shall not be withheld or altered to the detriment of the beneficiary, except as permitted under law, including the Code of Conduct provisions.

Despite this constitutional assurance, the actualization of pension rights for state and local government employees has faced significant legal and administrative challenges. These challenges are largely traceable to the evolution of Nigeria’s pension system, particularly following the comprehensive reforms initiated in 2004.

Historical Context
Before the landmark pension reforms of 2004, the Pension Act of 1990 governed pension administration across all tiers of government, Federal, Federal Capital Territory (FCT), States, and Local Governments. This statute provided a unified framework for pension management within the public sector. However, the enactment of the Pension Reform Act (PRA) 2004 fundamentally altered this structure.

Section 99(1)(a) of the PRA 2004 expressly repealed the Pension Act of 1990 with effect from 25 June 2004. The new legislation introduced the Contributory Pension Scheme (CPS), a system designed to ensure sustainable and transparent pension funding by mandating both employers and employees to make periodic contributions into individual Retirement Savings Accounts (RSAs).

However, the PRA 2004 applied only to employees in the public service of the Federation, the FCT, and the private sector. Consequently, employees of states and local governments were excluded from the statutory coverage of the CPS, leaving them without a uniform or enforceable pension framework.

The Role of PenCom, National Council of State
Recognizing this legal vacuum, the National Pension Commission (PenCom) sought to extend the benefits of the 2004 reform to subnational entities. PenCom drafted a model Pension Reform Bill and presented it to the National Council of State for consideration. The Council adopted the draft as a guiding template for state governments, recommending that State Houses of Assembly domesticate it through appropriate legislation.

This initiative aimed to create a harmonized pension architecture nationwide, ensuring that workers at the state and local government levels enjoyed the same protection as their federal counterparts. However, two decades after the repeal of the Pension Act 1990, implementation across states remains inconsistent and largely incomplete.

Implementation Status
According to data from the National Pension Commission’s First Quarter 2025 Report, as of August 2025, only seventeen (17) states had established Pension Bureaux under the Contributory Pension Scheme. Six (6) additional states were still at the legislative stage of adopting the CPS. For instance, Cross River State, despite passing the Pension Reform Bill, 2023, awaits gubernatorial assent to operationalize the law.

Furthermore, six (6) states have adopted the Contributory Defined Benefits Scheme (CDBS) as an alternative model. Among these, Jigawa and Kano are actively implementing the scheme, while Katsina State has initiated steps toward transitioning from the CDBS to the CPS framework.

Breakdown
The milestones outlined in PenCom’s 2025 report provide a detailed snapshot of the pension reform landscape in states and the FCT:
Full Implementation of CPS: Only seven (7) states, Lagos, Kaduna, Ekiti, Edo, Osun, Ondo, and Delta (substantially), along with the Federal Capital Territory (FCT), are fully or substantially implementing the Contributory Pension Scheme.
Full Implementation of CDBS: Jigawa State remains the only state fully implementing the Contributory Defined Benefits Scheme.

Partial Implementation: Four (4) states, Anambra, Kebbi, Benue, and Rivers are partially implementing the CPS, while Kano State is partially implementing the CDBS. Niger and Ogun States are currently extending their transition periods.
Non-Implementation of CPS: Eleven (11) states, Bayelsa, Taraba, Imo, Ebonyi, Oyo, Kogi, Enugu, Abia, Sokoto, Bauchi, and Nasarawa are yet to commence implementation of the CPS.

Non-Implementation of CDBS (Despite Adoption): Adamawa, Katsina, Zamfara, and Gombe States, though having adopted the CDBS framework, are not yet implementing the scheme.

States at Bill Stage: Six (6) states, Plateau, Cross River, Kwara, Borno, Akwa Ibom, and Yobe, remain at the legislative stage. Consequently, these states currently have no operational pension law safeguarding the retirement benefits of their public servants. Notably, Cross River State is the only state among these six without any law guaranteeing life pensions for former governors and their deputies.

Broken Promises and Betrayal
Two decades after the enactment of the Pension Reform Act of 2004, the uneven adoption and inconsistent implementation of pension reforms across states expose the entrenched insensitivity and neglect of workers and pensioners by the political ruling class. While a few states, such as Lagos and Kaduna have shown genuine commitment to pension sustainability through full implementation of the Contributory Pension Scheme (CPS), the majority have failed to follow suit. As a result, thousands of public servants who devoted their lives to national development are left to face uncertainty, indignity, and deprivation in retirement.

This failure is not merely administrative, it is a moral and constitutional dereliction. Section 210 of the 1999 Constitution clearly guarantees the right of every state public servant to a pension. It imposes on state governments a binding duty to legislate and execute pension schemes that safeguard the welfare of workers after years of service. The disregard of this obligation by many state governments reflects a broader culture of political indifference, where the comfort of those in power is prioritized over the constitutional rights and basic dignity of ordinary citizens.

Instead of upholding the social contract between the state and its workforce, political leaders have manipulated public resources to serve narrow personal and partisan interests, shielding themselves with generous benefits while abandoning retirees to poverty and bureaucratic neglect.

For any genuine progress to occur, state governments must move beyond rhetoric to action: domesticate and enforce the CPS or CDBS frameworks, ensure the prompt remittance of pension contributions, and empower functional, transparent pension bureaux. Restoring faith in the public retirement system requires leadership with empathy, integrity, and a renewed respect for the rule of law. Only then can Nigeria begin to honor the generations of workers whose labor built the foundations of the nation and who deserve, at the very least, security and dignity in their twilight years.