Federal Government Disburses ₦22 Billion for Retiree Pension Payments

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The federal government has released an additional ₦22 billion to settle accrued pension rights for retirees in Ministries, Departments, and Agencies (MDAs) funded by the federal treasury, the National Pension Commission (PenCom) announced late Tuesday.

The funds, disbursed through the Office of the Accountant General of the Federation, were deposited into the Retirement Benefits Bond Redemption Fund Account at the Central Bank of Nigeria. They will be used to pay verified retirees who were enrolled between October 2023 and January 2024 under the Contributory Pension Scheme.

In a statement shared on social media, PenCom confirmed that the disbursement also includes payments for accrued rights owed to deceased employees, with Pension Fund Administrators already crediting the appropriate Retirement Savings Accounts.

This latest payout raises the total amount allocated for accrued pension rights in the 2024 fiscal year to ₦66 billion. In December 2024, the government released ₦44 billion to settle rights owed to retirees between March and September of the previous year, though that move drew criticism from pension rights advocates.

The Center for Pension Rights Advocacy, a non-governmental organization focused on retirees’ welfare, lambasted the government for what it described as “selective” payments. The group argued that the government should focus on meeting its statutory obligations under the Pension Reform Act, rather than framing the payments as discretionary acts of benevolence.

PenCom, however, has directed Pension Fund Administrators to expedite the payment process for all eligible retirees, emphasizing the need for efficiency. Retirees are advised to complete the required documentation with their PFAs to access their benefits.

The delay in disbursing accrued pension rights has been a persistent issue for Nigeria’s pension system, drawing criticism from retirees and advocacy groups alike. PenCom has said it is collaborating with federal authorities to establish a more sustainable mechanism to ensure retirees receive their entitlements promptly.

“This release is part of our ongoing commitment to ensuring that retirees are not subjected to undue hardship while awaiting their benefits,” the commission said in its statement.

The Contributory Pension Scheme, which was introduced in 2004, is widely regarded as a critical reform for securing the financial futures of Nigerian workers. Yet economic headwinds, including inflation and currency depreciation, continue to erode the purchasing power of pensioners, highlighting the ongoing challenges in safeguarding retirement savings.

Tuesday’s announcement, while welcomed by retirees, underscores the broader systemic issues that remain unresolved in Nigeria’s pension system.

Key Details:

  1. Beneficiaries of the Disbursement:
    • Retirees from Treasury-funded Ministries, Departments, and Agencies (MDAs) who were verified and enrolled between October 2023 and January 2024 are eligible for this payment.
    • The accrued rights of certain deceased employees under the CPS have also been included in the disbursement. Pension Fund Administrators (PFAs) have credited the beneficiaries’ Retirement Savings Accounts (RSAs) with the allocated funds.
  2. Cumulative Disbursements in 2024:
    • This latest release brings the total amount disbursed for accrued pension rights under the 2024 Appropriation Act to ₦66 billion.
    • In December 2024, the Nigerian government previously released ₦44 billion to pay accrued pension rights for retirees from March to September 2023, including deceased retirees.
  3. Payment Instructions to PFAs:
    • PenCom has directed PFAs to accelerate the payment process for all verified retirees, ensuring timely access to their pension benefits.
    • Retirees are required to complete the necessary documentation with their PFAs to claim their benefits.
  4. Advocacy and Criticism of Delayed Payments:
    • The Centre for Pension Rights Advocacy had previously criticized the Nigerian government for delays in settling accrued rights, describing the selective payouts as inadequate.
    • It called for the government to fulfill its obligations under the Pension Reform Act (PRA) rather than adopting a “charitable employer” stance when addressing accrued pension rights.

Implications for Retirees:

The disbursement is expected to alleviate the financial difficulties faced by retirees awaiting their pension payments. However, the criticism from advocacy groups highlights the need for a more robust and consistent approach to fulfilling accrued pension obligations.

PenCom’s Efforts:

PenCom continues to push for policy reforms and improved processes to ensure retirees receive their benefits promptly and without undue stress. The commission has committed to working with the government to create a sustainable framework for timely disbursements.

This recent development underscores the importance of sustained government commitment to honoring pension obligations and addressing the challenges retirees face under the Contributory Pension Scheme.


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