This study presented a comprehensive analysis of the Pension Reform Act 2014 in Nigeria, a legislative measure designed to overhaul the country’s pension system and transition from a defined benefit scheme to a contributory pension scheme. The study examines the Act’s key legal provisions, its impact on various stakeholders, and its effectiveness in addressing the challenges associated with Nigeria’s previous pension systems, such as funding inadequacies, delays in benefit payments, and a lack of transparency. The research employs the doctrinal method, utilizing primary sources like legislation, judicial decisions, and secondary sources such as textbooks, legal encyclopedias, and scholarly articles to provide an in-depth understanding of the Act’s framework and its implementation. Key findings from the study reveal that the Pension Reform Act 2014 has significantly improved transparency and accountability within the pension system, primarily by mandating regular contributions from employers and employees, thereby linking pension benefits directly to contributions and investment returns. Furthermore, the Act has strengthened regulatory oversight, with the National Pension Commission (PenCom) playing a pivotal role in enforcing compliance and protecting contributors’ interests. Furthermore, the study identifies critical gaps in the Act’s reach, particularly in extending pension coverage to Nigeria’s informal sector workers, and highlights the challenges of achieving optimal investment returns due to conservative strategies adopted by Pension Fund Administrators (PFAs). The study concludes with several recommendations aimed at enhancing the effectiveness and sustainability of the pension system.
Keywords: contributory pension scheme, defined benefit, national pension commission., pension reform
