The Nigeria Labour Congress (NLC) is advocating for an increase in the lump sum payment for retirees to 50% under the Contributory Pension Scheme (CPS). This proposal aims to help retirees begin a comfortable retirement life.
NLC President Joe Ajaero, speaking at a retirement programme in Abuja, highlighted the concerns of retiring workers. He stated, “Many questions fill the minds of workers as they retire. Will my pension be paid immediately after I leave service? What will I survive on after my last salary? What will the real value of my pension be in terms of purchasing power? Will it be sufficient to cover my basic needs? Will I receive it regularly as expected? Will it be adjusted to keep pace with inflation to maintain its value?
“Will my pension be sufficient to service my mortgage? Will my health challenges be sufficiently addressed by my pensions? These are fears our pension system should address, yet, unfortunately, it often exacerbates them.
“Retirement, which should be a period of joy and rest, is too often perceived as a daunting prospect due to these concerns. Nigerian workers before and at retirement face life-changing challenges, including inadequate pension benefits that fail to meet basic living expenses. Inflation and rising living costs erode the value of fixed pension incomes over time. For example, those who had saved up to ₦10 million in their Retirement Savings Account (RSA) before 2023 have seen this value drop to around ₦3 million in real terms, which is unacceptable. Pension schemes often lack proper indexation to adjust for cost of living increases due to inflation.
“Delayed pension payments, inconsistent policy implementation, and a lack of support for the informal economy still persist, necessitating inclusive policies that integrate informal workers into the pension system.
“We demand the strengthening and reforming of the pension systems to ensure timely and adequate payments, and make pension governance more transparent to reduce looting. Policies need to be introduced to index pension benefits to inflation and cost of living, expand social support systems to include affordable healthcare, housing, and community services, and enhance financial literacy programs for retirees to help them manage their funds better.
“There should be policies to integrate informal sector workers into the pension framework, streamline and standardize pension policy implementation across all sectors and regions. More importantly, there is an urgent need to increase the percentage of lump sum payment on retirement to 50% and expand the investment options available beyond housing via mortgage arrangements to allow for more investment choices for workers to use their RSAs while in service.”
The NLC’s call for these reforms aims to alleviate the financial uncertainties and hardships faced by retirees, ensuring a more secure and dignified retirement.
