The National Pension Commission (PENCOM) has provided a detailed account of the N757.9 billion disbursed by the Federal Government to settle long-standing pension liabilities, amounting to N758 billion, describing the intervention as a major boost to retiree security and a sign of renewed fiscal credibility.
The Commission said the fund addressed pension obligations dating back to 2007 and marked one of the most significant pension interventions in Nigeria's history to settle outstanding pension liabilities in four key sectors, with pension enhancement accounting for the largest share.
According to the commission, N387 billion was allocated towards pension enhancement payable to retirees. Of this, N362.74 billion has already been distributed to about 9.1 million retirees, while the remaining N24.7 billion is being processed for payment.
The disbursement includes N252 billion for the accrued entitlements of federal employees who retired before the 2012 Contributory Pension Scheme (CPS), N107 billion for the Pension Security Fund to support low-income retirees and N10 billion specifically earmarked to settle outstanding pension obligations for professors in federal tertiary institutions, with payments being made in batches.
Additionally, Pencom reported that ₦107 billion was paid to cover the 2.5% shortfall in the federal government’s pension contributions between 2017 and 2021, benefiting about 750,223 retirement savings accounts.
Also read: 'The Nigerian pension system is evolving to meet the realities of the migrant workforce'
Overall, over N577.58 billion of the sanctioned funds has already been deposited into the accounts of retirees and contributors, directly impacting over 1.05 million RSAs across the country. Proceedings on the remaining are ongoing.
Speaking at the 2025 Pension Revolution Summit, whose theme was “365-Day Scorecard”, Omolola Oloworan, appointed Director General, PENCOM, described the intervention as an unprecedented demonstration of the Federal Government’s commitment to honoring pension obligations, commending President Bola Ahmed Tinubu for prioritizing the welfare of retirees and strengthening confidence in the pension system.
“One of the most historic milestones this year was the presidential approval and disbursement of 758 billion naira to settle outstanding pension liabilities. This unprecedented intervention sent a clear and powerful signal that Nigeria honors the promises made to its workers and retirees. Again, I say we walk the talk and honor,” she said.
He explained that the funds were applied to major pension obligations, including accrued rights, pension enhancement, pension protection fund and the long-standing pension shortfall for professors in federal tertiary institutions.
He said the intervention has reduced the waiting time for payment of accrued rights granted from July 2025 from 21 months to zero.
Beyond the pension approval, Olovoran highlighted wide-ranging reforms under his Pension Revolution 2.0 agenda, including full automation of key pension processes, advanced benefits processing platforms and the launch of the Pension Healthcare Initiative (Pencare) to support affordable healthcare for low-income retirees.
He said these reforms were structural rather than cosmetic, including new regulations, stronger supervision, governance reforms, digital transformation and industry restructuring.
He said the Commission has also reported strong compliance across the industry following the introduction of stricter pension withdrawal requirements. Pension contribution collections increased to $4.04 billion between January and November 2025, representing an increase of 180% compared to full year 2024.
“From January to November this year, the total pension recovery reached 4.04 billion Naira, while the total for the whole of 2024 was 1.44 billion. This represents an increase of 180%, which is almost 200%.
“But what is most striking is that ₹2.06 billion was recovered in the third quarter of 2025 alone. This is equivalent to the total amount recovered in 2024. And we also saw a similar shift, which is evident in the compliance behaviour,” the Director General said
According to him, the combined effect of the ₦758 billion intervention and ongoing structural reforms has strengthened confidence in Nigeria’s contributory pension scheme, improved benefit adequacy, and strengthened the role of the pension system as a pillar of long-term financial stability.
To improve benefit adequacy, Pencom also introduced Pension Boost 1.0, which has added ₦2.68 billion to the monthly pension payout for retirees under the contributory pension scheme from June 2025. He said the initiative is already improving the quality of life of retirees and preserving dignity in retirement.
On the technology front, the Director General revealed that Pencom has achieved complete automation of critical pension processes including pension payment certificates, benefit processing and contribution remittance platforms, which has significantly reduced delays and improved transparency.
Addressing pension coverage, Olovoran said Pencom restructured the micro pension scheme into individual pension scheme to accommodate artisans, traders, gig workers and other informal sector participants.
The revised scheme simplifies onboarding, expands digital enrolment, and introduces accredited pension agents, he said, adding that the move will boost financial inclusion while creating employment opportunities for young Nigerians.
On governance, the Pencom DG said capital requirements for pension operators have been increased to strengthen institutions, improve risk management and enhance professionalism across the industry.
He said the new governance rules have abolished shadow directors, stressing that transparency and accountability cannot be compromised in the management of the retirement savings of Nigerians.
Olovoran stressed that the summit was not a celebration but a review and commitment to deepen reforms, expand coverage, strengthen supervision and protect retirees and all retirement savings account holders.
He commended industry operators, media and Pencom staff for their role in driving the reforms, saying the pension revolution is no longer a promise but a process in motion that will continue to shape a more inclusive, flexible and credible pension system in Nigeria.
