The National Pension Commission says it will formally launch a healthcare programme targeting 30,000 low-income retirees in October, alongside a minimum pension guarantee for eligible beneficiaries under the Contributory Pension Scheme.

The commission’s Director-General, Omolola Oloworaran, announced the plans at its media conference in Lagos on Tuesday.

The healthcare programme, known as PenCare, is intended to provide essential healthcare at no cost to eligible retirees.

However, the treatments the programme will cover, the hospitals involved, and how long beneficiaries will receive this support remain unclear.

“The first is PenCare, our retiree healthcare programme. It will give eligible low-income retirees access to essential healthcare at no cost to them, beginning with 30,000 retirees,” she said.

Ms Oloworaran said the commission would also introduce a minimum pension guarantee, intended to provide a basic level of pension income for eligible retirees whose savings cannot support adequate payments.

“It will set a floor beneath which no eligible retiree under the Contributory Pension Scheme will fall,” she said.

Both initiatives are scheduled for launch during National Pension Week, which is expected to run from October 26 to 30.

Who can access PenCare?

Although the formal launch is planned for later this month, enrolment for PenCare is already available. PenCom’s registration portal describes the programme as a corporate social responsibility initiative jointly funded by the commission and pension fund operators.

The portal says the first phase will accommodate 30,000 retirees, with places allocated to ensure representation across pension fund administrators.

Selection is said to be on a first-come, first-served basis, subject to applicants meeting the eligibility requirements.

Access Pensions, one of the pension fund administrators, lists eligible applicants as retirees under the Contributory Pension Scheme who are aged 60 or above and receive monthly pensions of no more than N150,000.

Applicants are also expected to meet any additional verification requirements set by PenCom. Beneficiaries will be enrolled with a designated HMO to access healthcare services without paying for the covered care.

Healthcare costs and retirement income

The programme is expected to address a crucial gap between receiving a pension, which is often meagre, and affording basic healthcare. Retirees may need to pay for consultations, medication, and repeated tests from the same limited income used for essential expenses.

Nigeria’s heavy reliance on out-of-pocket payments adds to that risk.

According to the World Health Organisation’s Global Health Expenditure Database, direct payments by patients accounted for about 72 per cent of Nigeria’s current health expenditure as of 2023, warning that this exposes low-income households to deeper financial hardship and poverty.

Minimum pension guarantee

The proposed minimum pension guarantee is another measure to support retirement income.

Nigeria introduced the CPS through the Pension Reform Act 2004. The Pension Reform Act 2014 replaced the legislation.

Under the scheme, employers and employees contribute to retirement savings accounts, which pension fund administrators manage and invest to provide benefits after retirement. The system links retirement benefits to accumulated contributions and investment returns.

The minimum pension guarantee is intended to protect contributors with insufficient savings.

Section 84 of the 2014 Act provides a guaranteed minimum pension for retirement savings account holders who have contributed for a period specified by PenCom.

PenCom is also responsible for determining the guaranteed amount. The act establishes a Pension Protection Fund, funded by government contributions, industry levies and investment income, to support eligible pensioners.

Ms Oloworararan also disclosed increases in pension payments under the commission’s Pension Boost 1.0 initiative. She said the initiative raised monthly pensions for more than 241,000 retirees, increasing their combined monthly payments from N12.15 billion to N14.83 billion.

She also said retirement benefit approvals that previously took up to 21 months were now subject to a mandatory 48-hour service standard for pension fund administrators.