The Director-General of the National Pension Commission (PenCom), Omolola Oloworaran, has stated that the approved N758 billion Federal Government of Nigeria (FGN) bond will be released within three months to fully settle outstanding pension liabilities under the Contributory Pension Scheme (CPS).
Oloworaran made this known on Thursday during the PenCom Press Conference, attended by Nairametrics.
Recall that the Federal Executive Council (FEC) had, on February 5, 2025, approved the issuance of a N758 billion bond to settle outstanding pension liabilities for federal pensioners.
The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, had disclosed to the press that the approval would allow the Debt Management Office (DMO) to raise the funds needed to settle long-standing pension arrears.
Landmark Development for Pensioners
- She said the approved bond, sanctioned by President Bola Ahmed Tinubu, marks a defining milestone in the nation’s pension administration and a new dawn for pensioners, ensuring that the CPS fulfills its core mandate of providing timely and adequate retirement benefits.
- She added that this landmark bond resolves all accumulated pension liabilities, covering Accrued Pension Rights, Pension Increases Since 2007, the Pension Protection Fund (PPF), and University Professors’ Pension Shortfall.
“N253 billion has been allocated to settle outstanding entitlements for retirees of FGN Treasury-funded MDAs, addressing the delays caused by previous funding shortfalls. Going forward, accrued pension rights will be included in the monthly personnel cost general warrant, ensuring automatic and timely payments.
“N388 billion has been provided to clear pension increases that have remained unpaid for nearly two decades. This long-overdue entitlement, benefiting over 250,000 retirees, reflects the administration’s commitment to ensuring pensions remain fair and responsive to economic realities.
“For the first time, the FGN is contributing N107 billion to the PPF, ensuring that pensioners—particularly low-income earners—receive a living wage in retirement. This is a major step towards strengthening financial security for all retirees under the CPS.
“N11 billion has been allocated to fully implement the provision allowing eligible university professors to retire on their full salary, addressing the funding gaps that previously hindered its execution,” she said.
However, she explained that the FEC approval does not imply that funds have already been released.
“No, it doesn’t. This is just an approval, but it’s a significant step. It means we have approval; the bonds will be issued, and funds will be released.
“And by my estimation, I am hoping that within the next three months, we should have the bond issued, and funds will be released. But I expect it to happen sooner rather than later,” she said.
- She stressed that with this approval and the expected bond issuance, all accrued rights payments and backlogs will now be made to the respective Pension Fund Administrators (PFAs), and they can make timely payments to all retirees.
More Insights
- She assured that PenCom will continue working closely with all stakeholders to ensure the seamless issuance of the bond and the timely disbursement of pension payments.
- However, she added that achieving full implementation requires strategic collaboration among stakeholders.
The PenCom boss said that with the burden of outstanding liabilities set to be lifted, the pension industry will now focus on innovation, improved service delivery, and optimizing investment returns.
“Beyond immediate payments to retirees, it will stimulate the economy, deepen the capital market, and enhance overall financial stability,” she added.
She also mentioned that a renewed emphasis would be placed on expanding the Micro Pension Plan, ensuring that Nigerians in the informal sector can save securely for their future.
She expressed appreciation to President Bola Ahmed Tinubu and the Finance Minister for their unwavering commitment to pension reform through the historic N758 billion bond approval.
What You Should Know
- In 2004, the Federal Government of Nigeria enacted the Pensions Reform Act (PRA 2004), which introduced the Contributory Pension Scheme (CPS).
- The Act made it mandatory for employers and employees in both the public and private sectors to contribute towards the retirement benefits of employees.
- Since then, pension administration in Nigeria has faced challenges such as inadequate funding, poor management, low coverage, lack of awareness, and a weak regulatory framework.
