The Nigeria Labour Congress has called for an increase in the lump sum payment on retirement to 50% under the Contributory Pension Scheme.
This demand aims to help retirees start a comfortable retirement life.
NLC President Joe Ajaero spoke at a retirement program in Abuja, addressing various concerns of retiring workers.
Ajaero said, “Many questions fill the minds of workers as they retire; such as will my pension be paid immediately after I leave service? What will I survive on after my last salary in service? 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 pensions be sufficient to service my mortgage? Will my health challenges be sufficiently addressed by my pensions?”
He added, “These are fears that 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 as a result of some of these.”
Ajaero highlighted several challenges faced by Nigerian workers before and at retirement, including inadequate pension benefits, inflation eroding the value of fixed pension incomes, and delayed pension payments. He said, “For example, those who had saved up to N10 million in their Retirement Savings Account (RSA) before 2023 have seen this value dropped to around N3 million in real terms – a situation that is unacceptable. Pension schemes often lack proper indexation to adjust for cost of living increases due to inflation.”
He also mentioned issues such as inconsistent policy implementation and lack of support for the informal economy. “We demand the strengthening and reforming of the pension systems to ensure timely and adequate payments, make pension governance more transparent to reduce looting,” he said.
Ajaero proposed several measures to improve the pension system, including policies to index pension benefits to inflation and cost of living, expanding social support systems to include affordable healthcare, housing, and community services, and enhancing financial literacy programs for retirees. He also emphasized the need to integrate informal sector workers into the pension framework and to streamline and standardize pension policy implementation across all sectors and regions.
Ajaero concluded by stressing the urgent need to increase the percentage of lump sum payment on retirement to 50% and expand the investment options available for workers to use their RSAs while in service. “More importantly, there is an urgent need to increase the percentage of lump sum payment on retirement to 50% and expand the investment windows available beyond housing via mortgage arrangements to allow for more investment options for workers to use their RSAs while in service,” he said.
