The Federal Government has paid a total of ₦1.2 trillion in outstanding pension arrears owed to retired civil servants since the inception of the Contributory Pension Scheme (CPS) in 2004, up to the first quarter of 2025.
This significant step, aimed at addressing long-standing grievances, ensures that affected federal retirees now receive their monthly pensions promptly, as required under the CPS framework.
Previously, unpaid accrued pension rights had prevented many retirees from accessing their Retirement Savings Accounts (RSAs), despite having sufficient balances. The accrued rights—representing benefits earned before the CPS began—must be paid before a retiree can begin drawing monthly pension payments.
Over ₦700 Billion Paid in Two Years
In the past two years alone, the federal government has paid over ₦700 billion in arrears, demonstrating renewed commitment to clearing the backlog that had hindered the CPS’s effectiveness. As of now, arrears have been cleared up to March 2025, with payments for April and May pending.
To fully eliminate the backlog, the government has floated ₦750 billion in pension bonds, which are expected to facilitate the swift clearance of outstanding liabilities to retirees.
PenCom Introduces ‘Pension Boost’ Initiative
In another major development, the National Pension Commission (PenCom) is set to launch a ‘Pension Boost’ initiative starting June 2025, targeting over 223,000 retirees under the Programmed Withdrawal plan.
PenCom Director General, Ms. Omolola Oloworaran, made the announcement during the commission’s Q2 press briefing in Lagos. She explained that the new initiative—funded by returns on pension investments—will increase the monthly pension disbursement from ₦8.2 billion to ₦11.2 billion.
“This boost is a direct benefit from the investment performance of pension assets and will provide meaningful improvements to retirees’ monthly incomes,” she said.
PenCom Cracks Down on Defaulting Employers
Ms. Oloworaran also issued a stern warning to employers violating the Pension Reform Act (PRA) by failing to remit employee pension contributions. She said the commission is working closely with relevant stakeholders to disqualify non-compliant companies from bidding for government contracts or participating in regulated private-sector tenders.
“Those who have refused to comply with the pension laws should know their days are numbered. We are tightening compliance measures and ensuring that only firms with functional pension schemes can benefit from public or private partnerships,” she added.
A New Era for Retirees
Reaffirming the commission’s dedication to pensioners’ welfare, Oloworaran said PenCom is actively engaging with the federal government to settle the remaining arrears and strengthen the CPS.
“A new dawn has arrived in Nigeria’s pension sector. We are not only ensuring prompt payments but also working to grow retirees’ income through innovation and sound investment practices,” she said.
With the clearing of major arrears and the upcoming pension boost, retirees under the federal civil service are expected to experience a marked improvement in their post-service welfare.
