The National Pension Commission (PenCom) has announced plans to increase Nigeria’s statutory pension contribution rates as part of the ongoing review of the Pension Reform Act (PRA) 2014.
The disclosure was made by PenCom Director-General, Ms. Omolola Oloworaran, during the 2026 Pension Consultative Forum for States, the Federal Capital Territory (FCT), and Licensed Pension Fund Operators (LPFOs) held in Lagos.
If approved, the proposal would raise the amount employers and employees contribute to the country’s Contributory Pension Scheme (CPS), strengthening retirement savings for Nigerian workers.
What the data is saying
Under the existing pension framework established by the Pension Reform Act 2014:
- Employers contribute a minimum of 10% of an employee’s monthly emoluments.
- Employees contribute 8%.
- This brings the total mandatory pension contribution to 18% of monthly emoluments.
PenCom is proposing to increase this statutory contribution rate, although the Commission has not yet disclosed the new percentage being considered.
The proposal forms part of a broader review of the pension legislation aimed at strengthening the long-term sustainability of Nigeria’s pension system and improving retirement outcomes for contributors.
More insights
Increasing pension contribution rates would lead to larger monthly retirement savings, potentially improving the financial security of workers after retirement.
For employees, however, a higher contribution could reduce disposable income unless accompanied by wage adjustments, while employers may face higher payroll costs depending on how the revised contribution structure is designed.
The proposed review comes as Nigeria’s pension industry continues to record strong growth, with total pension assets recently surpassing ₦31 trillion, reflecting increased participation and sustained investment returns.
The consultative forum also highlights PenCom’s efforts to encourage greater adoption of the Contributory Pension Scheme by state governments and improve compliance with national pension standards across the federation.
Any amendment to the contribution rates would require changes to the Pension Reform Act, meaning the proposal must pass through the legislative process before taking effect.
What you should know
The planned review of the Pension Reform Act could lead to one of the most significant changes to Nigeria’s pension system since the 2014 legislation.
Key highlights include:
- PenCom plans to increase statutory pension contribution rates through amendments to the Pension Reform Act 2014.
- The current contribution structure requires 10% from employers and 8% from employees, for a combined 18%.
- The Commission has not yet announced the proposed new contribution rate.
- The initiative is aimed at strengthening retirement savings and enhancing the long-term sustainability of the Contributory Pension Scheme.
- Any change will require legislative approval before it can be implemented.
The proposal reflects PenCom’s commitment to strengthening Nigeria’s pension system as pension assets continue to expand and the number of contributors grows. While higher contribution rates could improve retirement benefits over the long term, policymakers will also need to balance the impact on employers’ labour costs and employees’ take-home pay as discussions on the reform progress.
