The National Pension Commission, in collaboration with licensed pension fund operators, has rolled out a healthcare scheme as part of its corporate social responsibility efforts targeted at low-income retirees. OLUWAKEMI ABIMBOLA explores the initiative, which seeks to ease retirees’ medical expenses, estimated at about 70 per cent of their costs, while safeguarding their dignity in later life
A common complaint among retirees when their monthly benefits are delayed is that they are unable to buy food or medication. To address this concern, President Bola Tinubu directed the rollout of a free healthcare access initiative for low-income retirees under the Contributory Pension Scheme. Following this directive, the National Pension Commission launched the industry-backed corporate social responsibility initiative known as PENCARE.
The Board of Trustees of the initiative, which shifts Nigeria’s pension landscape beyond the traditional disbursement of monthly stipends toward providing a social safety net for senior citizens in their most vulnerable years, was inaugurated in Abuja earlier in the year. The Board of Trustees of PENCARE is chaired by the pioneer Director-General of PenCom, Muhammed Ahmad.
Concerns about rising healthcare costs for retirees are not unique to Nigeria. According to a recent report by America’s Fidelity Workplace Consulting, total retirement health expenses increased by four per cent from 2024. This mirrors broader medical cost increases for all Americans, which rose by almost three per cent from 2024 and by more than 30 per cent over the past decade, according to Consumer Price Index data. Unfortunately, rising welfare costs are often overlooked during retirement planning, leading to a drain on retirees’ limited resources in later years.
Explaining PENCARE’s approach, Director-General Omolola Oloworaran emphasised at the 2025 PenCom Media Conference that the scheme is a strategic move to help elderly retirees live with dignity rather than in fear of medical expenses.
Oloworaran set the stage for this new era by outlining the vision for PENCARE as a critical component of the government’s broader welfare agenda.
She emphasised that the programme is not merely an administrative update but a moral commitment to the well-being of those who have served the nation. For retirees, a key attraction is that the programme is set to commence next year.
She said, “I am happy to announce that the pilot will be launched in March next year, and we hope to enrol about 30,000 retirees across the six geopolitical zones of the country.”
The PenCom DG noted that the pension industry is increasingly being positioned to respond to the social needs of retirees beyond monthly benefit payments. “We are building a pension system that protects not just income but also the well-being of those who have given their productive years to the nation,” she said.
To bring this vision to life, PenCom structured PENCARE as a corporate social responsibility project rather than a direct charge on the Contributory Pension Scheme.
This distinction is vital to preserving the financial integrity of Retirement Savings Accounts.
The Acting Director of the Compliance and Enforcement Department at PenCom, Ahmed Lawan, during his presentation at the summit, provided a detailed breakdown of how the scheme will be funded, governed, and scaled to meet the needs of Nigerian seniors.
He said the initiative is being funded through collaboration between the regulator and Pension Fund Operators, noting that it was conceived to fill the void created by the loss of formal health insurance upon retirement.
“As I mentioned, in this country, the day you retire from formal employment, you lose your insurance cover. Many pension contributors and retirees have been agitating, saying, ‘We want access to our funds to take care of our health.’ Because of that, the Commission asked, ‘What can we do?’ We are not the agency responsible for providing health insurance, just as we are not responsible for housing. But we asked ourselves whether we could bridge the gap and come up with a solution. Through collaboration and partnership, we agreed to introduce what we now call the Pension Industry Healthcare Initiative, PENCARE,” he said.
“PENCARE is a CSR initiative between Pension Fund Operators and the Commission. The Commission is setting aside a certain percentage of its fees, while pension operators are required to set aside a percentage of their profit after tax to fund this initiative. With the challenges of job termination, health issues, and inflation, you discover that retirement income is eroded over time. Unfortunately, as people age, health issues become paramount. Many retirees are unable to access medical care and financial security. This reality prompted the idea of PENCARE.”
He added, “The vision of PENCARE is to safeguard financial security and dignity for all CPS retirees through accessible healthcare. Our mission is to build a sustainable, pension industry-driven health insurance system anchored on corporate social responsibility. Nobody mandated us to do this; it is a voluntary partnership within the pension industry. The strategic goal is to protect retirees from health-induced poverty, reinforce social responsibility, and build public trust. The objective is to provide affordable, comprehensive healthcare, cushion retirees against financial hardship, reduce requests for early withdrawals, and demonstrate the industry’s long-term commitment. We have realised that, in the absence of social security, our role extends beyond pensions; it is social security.”
Lawan noted that the lack of a comprehensive social security system has made this pivot essential.
He said, “The earlier we realise this, the more effectively we can transform the system. With the DG’s vision, we are transitioning towards a broader social security framework to enhance the dignity and quality of life of senior citizens. PENCARE will be jointly funded by PenCom and licensed Pension Fund Operators. It is designed for retirees and is not drawn from pension fund assets. It represents a collective moral responsibility to give back to senior citizens and will strengthen the industry’s social impact profile.”
Beyond benefits to retirees, Pension Fund Operators also stand to gain because contributions to the initiative are tax-deductible. “It will serve as a tax incentive. If you are giving back to society, you should be eligible for a tax rebate,” he said.
On the structure of PENCARE, Lawan explained that because PenCom’s core mandate is pension administration and the healthcare initiative is a CSR project, an independent governance structure is required. “The Board of Trustees comprises two representatives from PenCom, four from licensed Pension Fund Operators, two independent experts, one health expert, one actuary and an independent chairperson. This structure ensures transparency. The Board is responsible for strategic oversight, policy direction, management and investment of the CSR fund, supervision of the health management organisation, and ensuring service quality, accountability, and sustainability.”
He noted that the scheme would be rolled out in phases: “We cannot cover everyone at once. Our strategy is to scale up as funds grow. Initially, we will cover retirees aged 60 and above earning pensions below N40,000. Enrolment will be through the pension funds, and we have introduced three categories to ensure flexibility.”
Lawan explained that flexibility would allow retirees earning above N40,000 to participate through co-payment arrangements: “We have individual co-pay, where retirees can enhance their coverage beyond the basic package, and institutional co-pay, where an employer can pay the basic cover for its retirees.”
It was also revealed that, in the long term, PENCARE will offer critical illness coverage for high-cost conditions such as cancer and kidney disease.
“Eventually, instead of bearing the full cost, the fund will provide support that significantly reduces medical bills,” he said.
The scale of the medical crisis facing retirees is not merely anecdotal; it is a significant economic reality. The Head of the Investment Supervision Department at PenCom, Abdulqadr Dahiru, placed PENCARE within the broader context of investment strategy and the retiree life cycle. He observed that healthcare often consumes more than two-thirds of retirees’ monthly income. By leveraging the profitability of the pension industry through a CSR model, he said, PenCom is providing social security support without undermining the long-term investment objectives of pension funds.
“The basis of PENCARE is that PenCom goes beyond pensions to consider retirees’ well-being. This is consistent with provisions that allow contributors, subject to guidelines, to use part of their savings to access mortgage loans. That has been ongoing, with many beneficiaries using it for home ownership or renovation,” he said.
“Healthcare is another critical component. Sixty to 70 per cent of retirement income goes to healthcare. For now, the only viable model is CSR. The only party surrendering income directly is the Commission. For operators, their contributions are tax-deductible, making it a zero-sum decision between donating to the initiative or paying tax.”
Dahiru added that PenCom plans to cover 30,000 retirees in the pilot phase and scale up to an additional 100,000 beneficiaries over time. “It is intended to be an endowment and therefore perpetual. This aligns with the Commission’s regulatory objectives.”
He reiterated that the absence of social security remains Nigeria’s core challenge: “What we have is an occupational pension. Social security is the conversation we must continue to have. Until we resolve it, the reality remains that many elderly people lack adequate support.”
The Acting Managing Director of the Pension Fund Operators Association of Nigeria, Anthonia Ifeanyi-Okoro, expressed enthusiasm for the project, saying, “At PenOp, we are delighted to partner with the National Pension Commission. We are grateful for a revolutionary and innovative regulator committed to sustainability, accountability, and value delivery to retirees. Initiatives such as PENCARE and other industry projects set a strong tone for the year ahead and mark the beginning of broader benefits for retirees.”
While industry enthusiasm for PENCARE is evident, retirees themselves express a more nuanced perspective. For many, health insurance is a welcome additional benefit, but it does not fully address concerns about low pension payments.
The National Coordinator of Police Retirees under the Contributory Pension Scheme, Christopher Effiong, told The PUNCH that while healthcare reform is positive, it should not overshadow the need for a comprehensive review of retirement rewards.
“Generally, involving retirees in a health insurance scheme is a positive development, especially in the current economic climate. However, the broader issue is the contributory pension scheme itself, which does not provide enough income for retirees,” he said. “Health insurance is an advantage, but retirees should also be adequately rewarded for their decades of service to national development and security.”
As the March 2026 pilot date approaches, the pension industry stands at a crossroads. With over N1bn already committed to the PENCARE fund and a governance structure designed for transparency, PenCom is betting that this social security experiment will become a model for broader inclusion across Africa. The success of the pilot will ultimately determine whether this industry-led initiative can bridge the gap between financial survival and the dignity every retiree deserves.
