Federal Government Approved N758bn Bond To settle Pension Arrears

The federal government has authorized the issuance of a N758 billion Federal Government of Nigeria (FGN) Bond to fully settle outstanding pension liabilities under the Contributory Pension Scheme (CPS), according to information released yesterday by Ms. Omolola Oloworaran, Director General, National Pension Commission (PenCom).

According to Oloworaran, the historic bond will settle all outstanding pension obligations.

Oloworaran praised President Bola Tinubu’s prompt action during a media conference held in Abuja on the sidelines of the Quarterly PenCom/Operators Consultative Forum. According to her, it marked a new era for retirees and made sure the CPS fulfilled its primary responsibility of paying out retirement benefits on schedule and in sufficient amounts.

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She stated that in order to make up for the delays brought on by earlier financial shortages, N253 billion had been set aside to settle unpaid claims under the Accrued Pension Rights for retirees of Federal Government Treasury-funded Ministries, Departments, and Agencies (MDAs).

In order to guarantee automated and prompt payments, the PenCom director-general announced that accrued pension rights will now be covered by the monthly personnel cost general warrant.

Additionally, the bond would cover N388 billion in unpaid pension increases since 2007 that have been outstanding for almost 20 years.

“Benefitting more than 250,000 retirees, this long-overdue entitlement reflects the administration’s commitment to ensuring pensions remain fair and responsive to economic realities,” Oloworaran stated.

In order to guarantee that pensioners, especially those with low incomes, receive a livable wage in retirement, she announced that the federal government would be making its first contribution of N107 billion to the Pension Protection Fund (PPF).

“This is a significant step towards enhancing financial security for all retirees under the CPS,” she stated.

In order to fully implement the provision that permits eligible university professors to retire on their full pay, N11 billion was allotted to the pension shortfall for university professors. This filled in the funding shortfalls that had previously prevented the provision from being implemented.

“With this audacious move, President Tinubu has established a new benchmark for pension management in Nigeria, essentially putting the CPS back on track for sustainability,” Oloworaran stated.

However, strategic cooperation is necessary to achieve complete execution. PenCom will keep collaborating closely with all parties involved to guarantee the bond’s smooth issuance and the prompt distribution of pension benefits.

“Efficiency, accountability, and transparency in the administration of retirement benefits continue to be our top priorities.”

She emphasized that the settlement of pension liabilities helped to rebuild trust in the CPS and set up the pension sector for sustained expansion.

Beyond the immediate payouts to retirees, the director-general of PenCom stated, the action will deepen the capital market, boost economic stimulation, and improve overall financial stability.

“Now that this burden has been removed, the pension sector can concentrate on innovation, better service delivery, and maximizing investment returns,” she said. Additionally, there will be a renewed focus on growing the Micro Pension Plan to guarantee that Nigerians working in the unorganized sector can work safely in the future.

“This accomplishment would not have been possible without President Bola Ahmed Tinubu’s visionary leadership, whose unwavering commitment to pension reform has made this historic milestone a reality,” Oloworaran stated.

She also praised Mr. Wale Edun, the Coordinating Minister of the Economy and Minister of Finance, for helping to make the project a reality.

“We stand at the cusp of a transformed pension industry today, one that genuinely fulfills its mission, ensures retirement dignity, and propels economic advancement,” Oloworaran stated.

As of January, it was revealed that 370,568 retirees have access to N1.18 trillion in lump sum payments.