Fed Govt To Clear Pension Arrears In Three Months      

The Federal Government has promised to clear all pension arrears in the next three months.

To effectively accomplish this task, the government said it had approved a N758 billion bond to settle all outstanding pension liabilities under the Contributory Pension Scheme (CPS).

The bond is expected to be issued within the next three months or sooner, allowing retirees to receive their accumulated payments.         

Addressing reporters at the end of the quarterly PenCom/operators consultative forum yesterday in Abuja, the Director General of the National Pension Commission (PenCom), Omolola Oloworaran, expressed optimism about the timeline for disbursing the funds.

“By my estimation, I’m hoping that within the next three months, we will have issued the bond and funds will be released. But I expect it to happen sooner than later,” she said.

The move followed an earlier announcement by the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, who announced that the Federal Government planned to raise N758 billion from the capital market to clear pension liabilities. 

Now, with official approval granted for the bond issuance, Oloworaran confirmation would be made soon.

“With this approval, and the expected bond issuance that should happen very soon, all approved rights and payments, as well as all backlogs will now be made to the respective pension fund administrators (PFAs), and they will be able to pay to all retirees up to date, actually. The bonds will be issued, and funds will be released,” she said.

The PenCom director general described the intervention by President Bola Ahmed Tinubu as a “new dawn for pensioners”.

She said the intervention ensured that the CPS has fulfilled its core mandate of providing timely and adequate retirement benefits.

When fully subscribed, the bond will clear all accumulated pension liabilities.
According to Oloworaran, N253 billion has been allocated to settle outstanding entitlements for retirees of Treasury-funded Ministries, Departments, and Agencies (MDAs), addressing the delays caused by previous funding shortfalls.

To prevent future backlogs, accrued pension rights will now be included in the monthly personnel cost general warrant, ensuring automatic and timely payments.

The PenCom boss added that N388 billion had been provided to clear pension increases that were unpaid for nearly two decades to over 250,000 retirees.

“This reflects the administration’s commitment to ensuring pensions remain fair and responsive to economic realities,” she said.

For the first time, the Federal Government is contributing N107 billion to the Pension Protection Fund (PPF) to ensure that pensioners, especially low-income earners, get a living wage in retirement.

“This is a major step towards strengthening financial security for all retirees under the CPS,” Oloworaran said.

Besides, N11 billion has been allocated to fully implement the provision that allows eligible university professors to retire on their full salary, addressing the funding gaps that previously hindered its execution.

The PenCom DG highlighted the broader economic impact of the bond issuance, saying it would serve a dual purpose.

“Number one, the appropriate bond issuance that PFAs will invest in can help both corporations and the capital markets. The proceeds from the bond issuance, which PFAs and Nigerians will invest in, will yield healthy returns,” she said.

The PenCom boss also noted that the funds received from the bonds would flow into various pension interventions, including pension increases, the Pension Protection Fund, and accrued rights payments.

This, Oloworaran said, would put money in the hands of ordinary Nigerians, particularly retirees.

“It will increase the purchasing power of ordinary Nigerians who are retired, who are living on a minimum pension, whose pensions cannot support them. When you start earning more, your purchasing power increases, and your overall well-being improves,” she said.

Shedding light on the concerns about whether or not the bond would be fully subscribed to, Oloworaran dismissed any doubts, citing current favorable economic conditions.