On June 25th, 2004, President Olusegun Obasanjo signed the Pension Reform Act (Pencom Act 2004) into law, ushering in a new era of pension reforms in Nigeria. The Act established the Contributory Pension Scheme (CPS), requiring both public and private sector employees to contribute towards their retirement savings, a move aimed at ensuring long-term sustainability for the country’s pension system.
Despite these reforms, a glaring contradiction persists. While 28 states have yet to fully implement the CPS, 18 states continue to provide lifetime pension packages for their former governors and deputy governors. These pension-for-life arrangements, which often include hefty allowances, luxury cars, and staff, are granted regardless of the governors’ contribution to the CPS or the financial burden they place on the state.
This discrepancy between the intent of the Pencom Act and the ongoing practice of providing generous post-office benefits to political elites raises critical questions about the true commitment of state governments to pension reform. It highlights a deep divide between the aspirations for a fair, sustainable system for workers and the continued privilege granted to Nigeria’s political leadership
