Sustaining Minimum Pension Guarantee
As the federal government sets for official launch of the Minimum Pension Guarantee, pension sector analysts have pointed out areas both PenCom and government should review after the launch to ensure sustainability of the initiative, writes Ebere Nwoji
President Bola Ahmed Tinubu, will in one week time, precisely on November 10th, launch two critical projects of the National Pension Commission (PenCom), namely Minimum Pension Guarantee and PenCare projects.
This was announced by the National Pension Commission( PenCom) recently in Abuja.
The Director General, PenCom, Ms. Omolola Oloworaran, who announced this at the National Pension Summit 2026, one of the activities that marked the recently concluded maiden edition of the National Pension Week, said these would further enhance and expand the pension system in Nigeria and improve the lot of Nigerian workers and pensioners.
Pension sector analysts said the news of the proposed launch of the two projects was cheering to both Nigerian workers, retirees and other stakeholders in the pension sector.
According to them, it is cheering news in the sense that the two projects, if launched as proposed by Federal Government, would place an average Nigerian worker and pensioner at par with his or her counterparts in other climes.
They further said it would indeed ignite hope of better life for Nigerian workers retiring from active service and those already retired. The analysts said it would go a long way to erase fears associated with retirement in Nigeria which according to them have over the years encouraged falsification of age by Nigerian workers at point of employment.
The analysts said the launch would pave way for young graduates to be employed as existing workers would be eager to retire at the appropriate time to give way for upcoming young graduates to fill their vacant position since they are sure that the minimum pension guarantee initiative would give them something substantial to sustain their lives even at retirement.
Origin of MPG
The MPG, is a statutory safety net established under Sections 82 and 84 of the Pension Reform Act (PRA) 2014, designed to ensure that eligible retirees under the Contributory Pension Scheme (CPS) receive a baseline minimum level of pension income.
The Legal Framework establishing it was provided under PenCom to protect low-income retirees or those whose Retirement Savings Account (RSA) balances are exhausted or insufficient to sustain a decent standard of living.
It was backed by the Pension Protection Fund (PPF), which recently received federal funding support, including a N107 billion injection and a N758 billion pension bond approval to address accrued rights and low-balance accounts.
The Minimum pension Guarantee enacted in the 2014 Pension Reform Act, has obviously suffered delay for 12 years in terms of implementation .
But PenCom in line with various reforms and initiatives rolled out by its present administration led by Omolola, scheduled the launch and implementation of the project for November 10.
On the workings of the initiative, under current PenCom guidelines, if an RSA balance is too low to provide a monthly or quarterly pension equal to at least one-third of the national minimum wage (calculated against the N70,000 national minimum wage as N23,333.33), retirees can choose to take the balance en-bloc (as a lump sum) or wait for the MPG framework to take effect.
Sustainability Concerns
Launching of the MPG project is no doubt laudable but pension stakeholders, sector watchers and retirees are much more concerned and worried on sustainability of these laudable initiatives.
Their worries on continuity and sustainability of the project are obvious considering Nigeria’s culture of policy somersault which has been the bane of development of various sectors of the economy.
Past experiences in the country especially on pension matters by past administrations have created room for these fear.
Indeed, pensioners themselves are afraid of what their fate would be on these two initiatives when the present administration of both President Bola Ahmed Tinubu and Omolola as PenCom Director General expires. Obviously the duo who are key drivers of these beautiful projects cannot be in their present positions for ever then the question becomes will their successors have the same passion they have on pensioners and will their successors be willing to continue the implementation given the quantum of fund it will cost federal government to contribute its own quota of the fund involved.
Pensioners’ Reaction
Enquiries by THISDAY indicated mixed feelings among retirees on this .
For instance a pensioner Mr Azubuike ojinnaka who retired from Nigerian National Petroleum Corporation (NNPC ), said it was a very good initiative that demonstrated the passion which both the present DG of PenCom and president Tinubu have for pensioners.Commending other initiatives in favour of the present administration in PenCom to better pensioners’ life, he was however quick to remember repeated reversal of similar policy among targeted at improving the lots of the retirees in the past.
He cited example of the electricity sector pension adjustments initiative approved by President Bola Ahmed Tinubu for retirees from the defunct National Electric Power Authority (NEPA) and Power Holding Company of Nigeria (PHCN) but was reversed by the National Salaries, Incomes and Wages Commission.
According to him, in this particular case which was widely reported and criticised, the Pension Transitional Arrangement Directorate (PTAD) had already paid 24 months of arrears for the 10.6 percent increase, but a later circular from the Commission claimed the payment was erroneous and demanded its reversal.
“A January 2026 circular explicitly excluded electricity sector retirees from the aforementioned benefits and from the ₦32,000 pension increase tied to the new minimum wage, instead replacing it with a 13.8 percent adjustment. Retirees accused this of being a reversal and unfair treatment”, he recalled.
Ojinnaka implored the present administration in the country to ensure sustainability of the initiative.
MPG Challenges
Aside this problem of sustainability, pension sector analysts believe that the MPG at the level of implementation may face challenges in the area of insufficient and unstable funding sources, lack of dynamic adjustment mechanisms that make the guaranteed amount difficult to withstand inflation, and eligibility design that may exclude large numbers of informal sector workers and those with interrupted contribution records.
In their views, the MPG relies on the Pension Protection Fund (PPF) for payment, with statutory sources including 1 percent of the federal government’s total monthly wage bill, pension protection levies from PenCom and pension operators, and investment returns.
They pointed out that the federal government initially failed to fulfill its funding obligations for an extended period, after operators contributed their portion, which directly delayed the launch of MPG.
They argued that although the government has recently injected ₦107 billion into PPF, there are fears on whether there would be long-term stable funding .
Eligibility Barriers
MPG is tied to the Contributory Pension Scheme (CPS) and is not a universal old-age benefit. Therefore eligibility typically requires a specified number of contribution years, which means that
Informal sector workers (traders, farmers, artisans among others have long lacked formal pension coverage and will not qualify for MPG;
Also workers with interrupted employment or whose employers failed to remit contributions may also fail to meet the contribution requirements;
Determining who qualifies and how much to pay requires accurate contribution records and actuarial calculations. Analysts point out that PenCom’s database requires stronger actuarial inputs to support such decisions, but existing biometric and data systems still have gaps.
The MPG initiative is a beautiful initiative from PenCom supported by the federal government, therefore efforts should be geared towards its sustainability in the area of policy consistency in place of policy sumersult and reversal, undignified sustainability and guard against negative impact of inflation.