The National Pension Commission (PenCom) has urged Governor Babajide Sanwo-Olu of Lagos State to broaden the scope of periodic pension increases, applied to retirees under the Defined Benefit Scheme (DBS).
Director-General of PenCom, Ms Omolola Oloworaran, made the appeal during a courtesy visit to the governor at the Lagos State Government House on Wednesday.
According to her, PenCom is advocating for this benefit to be extended to pensioners enrolled in the Contributory Pension Scheme (CPS) within the state.
She said this would boost the pensioners monthly income.
Oloworaran noted that only DBS retirees were paid pension increases in Lagos State, leaving out their counterparts under the CPS.
She made a case for the prioritisation of retirees under the CPS given the contributory nature of the scheme and lauded the state as a leading model in the federation for its effective implementation of the CPS.
Oloworaran also highlighted key achievements which included the consistent deduction and remittance of employee contributions to their Retirement Savings Accounts (RSAs).
She said other achievements were: full settlement of all backlog of accrued pension rights, the existence of a valid Group Life Insurance Policy for most public service employees, and the deployment of advanced ICT systems to enhance pension administration in Lagos State.
In spite of the progress, PenCom DG proposed a partnership with Lagos State to make the Pension Clearance Certificate (PCC) a mandatory requirement for companies seeking government contracts and services, as practiced at the federal level.
Oloworaran recommended transitioning unremitted contributions, currently held in commercial banks’ escrow accounts, into Transitional Contribution Fund (TCF) accounts managed by Pension Fund Administrators (PFAs) to optimise investment returns.
She also advised the state government to implement an Irrevocable Standing Payment Order (ISPO) for pension contributions to be automatically deducted and remitted from Federation Account Allocation Committee (FAAC) allocations.
The director-general said this was to protect pension remittances from potential administrative delays.
She commended the state for its N600 million bailout for outstanding accrued rights of Lagos State University of Education (LASUED) retirees.
She also appealed for further intervention to address unpaid benefits from 2023 and 2024.
Oloworaran also urged the governor to consider implementing the Minimum Pension Guarantee (MPG), similar to what obtains at the mandatory CPS level.
She informed the governor that the federal government had started its MPG contributions and included it in the recent approval to issue the N758 billion bond to clear pension liabilities.
In his response, Sanwo-Olu reaffirmed the state’s commitment to pension reforms and commended the collaborative relationship with PenCom under the current leadership.
The governor expressed support for implementing pension increases for CPS retirees while emphasising the importance of workers’ welfare in his administration’s agenda.
Expressing optimism over the sustainability of reforms by future administrations, he noted that an ISPO might not be necessary at this time.
Sanwo-Olu also called on PenCom to support Lagos State’s developmental initiatives by encouraging pension fund investments in government-issued bonds.
