The National Pension Commission has unveiled plans to create dedicated revenue streams for state pension bureaus as part of efforts to strengthen pension compliance across the country.
The initiative is designed to incentivise state governments to fully adopt and implement the Contributory Pension Scheme.
The Director-General of PenCom, Omolola Oloworaran, disclosed this on Tuesday in Lagos at the 2026 Consultative Forum for States, the Federal Capital Territory and Licensed Pension Fund Operators.
Addressing funding and operational challenges facing pension administration at the sub-national level, PenCom said it was committed to developing sustainable financial incentives to support state governments.
“We have listened to them, and I think there is a good point in what they are saying. We will explore ways to create income streams for state pension bureaus. It might not be in the exact form they are prescribing, but we will certainly do something,” Oloworaran said.
The move comes amid growing concerns over the low level of pension compliance across the country. PenCom said only eight of Nigeria’s 36 states have fully implemented and are operating under the Contributory Pension Scheme.
Expressing dissatisfaction with the situation, Oloworaran described compliance at the state level as poor and urged governors to demonstrate greater political commitment to protecting the welfare of their workers.
“I am not satisfied at all with where we are,” Oloworaran cautioned.
“If you were to rate it, we still have an ‘F9.’ We still have only eight states out of 36 states complying. There has to be more political will. Governors must prioritise their workers and their future when they retire, not just worry about today. All 36 states should be under the Contributory Pension Scheme”, she added.
Oloworaran warned that keeping workers’ pension deductions in state government accounts exposes retirement savings to significant political risks and possible administrative diversion, especially during changes in political leadership.
“In my personal opinion, deducting funds from employees and putting them in a state account is something that should never happen.
“Any incoming governor who doesn’t understand the original purpose of those funds could divert them elsewhere. That results in pension obligations skyrocketing and leads to a broken system in the future. We will actively engage those states to stop this practice,” she warned.
Reaffirming the state’s commitment to effective pension administration, the Director-General of the Lagos State Pension Commission, Babalola Obilana, who spoke on behalf of the Lagos State Head of Service, Bode Agoro, said the state remained committed to timely remittances, consistent funding of pension benefits and continuous institutional strengthening.
PenCom stressed that the full adoption of the CPS by all 36 states was essential to curbing the accumulation of unfunded pension liabilities and ensuring that workers receive their retirement benefits promptly upon retirement.
