Tinubu approves N758bn bond to clear Pension backlog

As of May 2024, the federal government’s total liability for implementing pension increases from 2007, 2010, and the 2019 consequential adjustment for CPS retirees reached N314.58 billion.

President Bola Tinubu has approved a N758 billion Federal Government of Nigeria (FGN) Bond to fully settle outstanding pension liabilities under the Contributory Pension Scheme (CPS).

The Director-General of the National Pension Commission (PenCom), Ms. Omolola Oloworaran, announced the development at a news briefing in Abuja, describing it as a “new dawn for pensioners.” She emphasized that the approval would ensure the CPS fulfills its core mandate of providing timely and adequate retirement benefits.

Breakdown of the bond allocation includes N253 billion to settle accrued pension rights for retirees of Federal Government Treasury-funded MDAs, addressing delays caused by previous funding shortfalls.

Three hundred and eighty-eight billion to clear pension increases since 2007, benefiting over 250,000 retirees and ensuring their entitlements remain fair and responsive to economic realities.

Additionally, one hundred and seven billion for the Pension Protection Fund (PPF) to guarantee financial security for pensioners, particularly low-income earners and eleven billion to address University Professors’ Pension Shortfall, ensuring eligible professors retire on full salary as stipulated by law.

Ms. Omolola noted that, moving forward, accrued pension rights would be included in the monthly personnel cost general warrant, ensuring automatic and timely payments.

She lauded President Tinubu’s intervention, stating that it sets a new benchmark for pension administration in Nigeria and places the CPS on a path to long-term sustainability.

Nigeria’s Contributory Pension Scheme (CPS), established to ensure timely and adequate retirement benefits, faces significant challenges due to outstanding pension liabilities. As of May 2024, the federal government’s total liability for implementing pension increases from 2007, 2010, and the 2019 consequential adjustment for CPS retirees reached N314.58 billion.

This situation has arisen because, despite constitutional provisions mandating pension reviews every five years or alongside federal civil service salary adjustments, these increments have not been extended to CPS retirees. The National Pension Commission (PenCom) has expressed serious concerns over this omission, highlighting it as a fundamental breach of retirees’ constitutional rights and a potential undermining of the pension reform objectives.

Therefore, President Bola Tinubu’s approval of a N758 billion Federal Government Bond to fully settle outstanding pension liabilities under the Contributory Pension Scheme (CPS) is a monumental development for retirees.

This decisive action addresses pension arrears that have accumulated over the past 16 years, providing long-awaited relief to thousands of affected retirees and could reinforce trust in the nation’s pension system, ensuring that retirees receive their rightful entitlements promptly.