Concerns over the adequacy of Nigeria’s pension system are resurfacing, with an actuarial expert calling for a transition to a hybrid model to strengthen retirement outcomes for workers under the current framework.
In a commentary on Business a.m., Pius Apere, an actuarial scientist and chartered insurer, said the Contributory Pension Scheme (CPS), established under the Pension Reform Act 2014, has not consistently delivered adequate and sustainable income for retirees, citing structural limitations and prevailing economic pressures.
Apere argued that the scheme, while designed to ensure sustainability by shifting pension funding to a contributory structure, leaves workers significantly exposed to investment and longevity risks, with limited provision for substantial lump-sum benefits at retirement. He noted that these gaps have continued to fuel concerns among stakeholders and prompted policy adjustments in recent years.
According to him, emerging reforms within the pension space already suggest a gradual shift toward a hybrid system that combines elements of both defined contribution and defined benefit models. Such an approach, he said, would allow risks to be more evenly distributed between employers and employees while improving income security in retirement.
He pointed to recent initiatives by the National Pension Commission, including the reintroduction of gratuity payments for federal civil servants, the rollout of healthcare support for low-income retirees, and plans to implement a minimum pension guarantee, as indications of this evolving direction.
While describing the transition as timely, Apere cautioned that its success would depend on sound policy design and sustainable funding structures. He warned that poorly implemented benefit schemes could recreate fiscal pressures associated with earlier pension systems if not carefully managed, while also stressing the need for coordination across institutions to avoid duplication and inefficiencies.
The expert further called for broader adoption of reforms across all tiers of government, noting that aligning federal, state and local pension frameworks would be critical to achieving a more equitable and functional system.
His intervention comes at a time when the Federal Government is intensifying efforts to address longstanding pension liabilities and improve compliance within the CPS. The ongoing nationwide verification and enrolment exercise for civil servants with accrued pension rights, coordinated by PenCom, is aimed at capturing accurate records to support the settlement of obligations carried over from the pre-2004 Defined Benefit Scheme.
The exercise, which began in February and is expected to run until the end of July, has been structured in phases to ensure efficiency and full coverage of eligible workers across treasury-funded Ministries, Departments and Agencies.
Despite these arrangements, participation levels have remained below expectations, prompting a directive from the head of the Civil Service of the Federation mandating full compliance by affected institutions. Authorities say the process is critical to determining outstanding pension liabilities and ensuring that adequate provisions are made for their settlement.
The verification drive is also supported by a digital platform introduced by PenCom to improve data accuracy and streamline processing, marking a shift away from the manual systems that previously contributed to delays and incomplete records.
As the deadline approaches, officials have urged increased awareness and participation, warning that failure to complete the process could complicate the computation and payment of accrued pension rights at retirement.
While the exercise is expected to strengthen the administrative foundation of the CPS, Apere’s submission highlights a broader policy debate on the future direction of pension reform in Nigeria, one that increasingly centres on balancing financial sustainability with the need to deliver more predictable and adequate retirement income.
