PENGASSAN Hosts Summit on Strengthening Pension Management in Oil and Gas Sector

By Chinedu Echianu

The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has organized a one-day summit on the future of pension administration in the nation’s oil and gas industry, aimed at addressing issues affecting Closed Pension Fund Administrators (CPFAs) and improving retirees’ welfare.

The summit, themed “The Future of Pension in the Nigerian Oil and Gas Industry,” brought together key stakeholders including the National Pension Commission (PenCom), pension fund custodians, and operators to discuss sustainable practices and fair pension management for workers and retirees in the sector.

Speaking at the event, PENGASSAN President, Comrade Festus Osifo, explained that the forum was convened to evaluate current challenges within CPFAs and promote best practices that ensure retirees’ benefits reflect economic realities.

Osifo traced the evolution of the closed pension system to the 2004 Pension Reform Act, which introduced the contributory pension scheme. He noted, however, that several oil and gas companies were exempted from the new system and allowed to operate “closed” schemes, where only employers contribute to employees’ retirement funds.

“When you say closed pension fund, it means employees do not contribute. It is the employer that guarantees their pension, which is why it’s called a closed system,” he said.

He further explained that CPFAs are managed independently but are financially guaranteed by the sponsoring companies, which periodically conduct actuarial valuations to ensure adequate funding. “The money contributed is kept with approved custodians such as Zenith Custodian, while the CPFA handles administration. It’s a very secure system,” Osifo said.

However, the PENGASSAN President expressed concern that many CPFAs have failed to review retirees’ benefits despite inflation and naira devaluation. “We have retirees who left service 20 years ago still earning between ₦120,000 and ₦130,000 monthly. Twenty years ago, ₦100,000 was valuable, but today, it can barely sustain anyone,” he said.

Osifo cited TotalEnergies’ CPFA as an example of best practice, noting that the company regularly reviews pensions in line with negotiated wage increases. “In TotalEnergies, when we negotiate, a portion of the increase always goes to retirees, ensuring their pensions retain value. That’s how it should be across the industry,” he added.

He lamented that some CPFAs and company managements have not been as responsive, even when the funds under their control have grown above inflation. “The CPFA grows, but retirees don’t feel the impact. That’s why we brought everyone together — to learn, share experiences, and push for reforms that prioritize pensioners’ welfare,” he said.

Osifo emphasized that the 2014 Pension Reform further restricted new entrants into the closed pension system, mandating that all employees hired after that year must join the contributory pension scheme. “Our focus now is on those who were employed before 2014 and remain in the CPFA. We must ensure that their pensions are guaranteed and sustainable,” he stressed.

He said the summit’s objective was to ensure that retirees who served Nigeria’s oil and gas sector “retire with dignity” and that their benefits reflect their years of service and contribution to national development.

Osifo concluded by reaffirming PENGASSAN’s commitment to protecting workers’ welfare, both during and after service, saying: “Our pensioners gave their best to this country. It is our duty to ensure their pensions can truly take them home.

Following the opening session, stakeholders proceeded to a closed-door meeting to discuss practical steps and policy recommendations aimed at strengthening pension administration in the oil and gas industry.