Federal Govt 41 Months Ahead in Accrued Pension Rights Payment — PenCom

The federal government is 41 months ahead in the payment of accrued pension rights to retiring public servants, the National Pension Commission has said.

The head of PenCom’s Corporate Communications Department, Ibrahim Buwai, disclosed this at the 36th Annual Conference of the Finance Correspondents Association of Nigeria (FICAN), held in Lagos at the weekend.

Buwai said the development meant that pension liabilities owed to federal government employees retiring up to December 2029 had been provided for.

“Today, we are 41 months in surplus. This means that we have paid the accrued pension rights of federal government employees due to retire up to December 2029,” he said.

He described Nigeria’s 2004 pension reform as one of the country’s most significant and enduring financial-sector transformations, saying successive administrations had sustained and deepened it.

“Since 2004, when Nigeria embarked on pension reform, to the present administration, the reform has been sustained and deepened. The reform is one of the enduring reforms in the financial sector,” Buwai said.

The conference, themed “Building on the Gains of Recapitalisation, Tax Reforms and the Fintech Revolution,” brought together financial journalists, regulators, policymakers and other stakeholders to examine developments shaping Nigeria’s financial and economic landscape.

Pension sector records turnaround

According to Buwai, the pension sector has moved from a position of deficit to surplus, reflecting progress in the payment of accrued pension rights of retiring federal employees.

He, however, said challenges remained, particularly delays in the payment of pension obligations in the public sector.

“However, we have also encountered challenges relating to delayed payments in the public sector,” he said.

Buwai identified the recent payment of additional benefits to retired federal civil servants as another major development in the implementation of the pension reform.

He said the Federal Government had paid about N1.1bn in additional exit benefits to 175 retired civil servants who worked in Treasury-funded ministries, departments and agencies.

The beneficiaries retired between January 1 and August 31, 2026.

CPS retains provision for gratuity

The PenCom official clarified that the Contributory Pension Scheme had not abolished gratuity or prevented employers from granting additional retirement benefits to their workers.

He cited Section 4 of the Pension Reform Act, which provides for additional benefits where employers are able and willing to provide them in accordance with the law.

“The pension scheme has not taken away gratuity. Section 4 of the Pension Reform Act makes ample provision for additional benefits, as long as the employers are able to provide them,” Buwai said.

He urged private-sector employers to emulate the Federal Government by considering additional retirement benefits for their employees, particularly in recognition of their years of service and contributions to organisational growth.

Buwai said supplementary benefits would complement the formal pension system and strengthen retirement security for Nigerian workers.

He also called for sustained reforms, responsible management of pension funds, timely remittances and improved compliance by employers to consolidate the gains recorded in the sector.

Nigeria introduced the pension reform in 2004 to replace largely unfunded and unsustainable defined-benefit arrangements with a contributory system. Since then, the scheme has become a major component of the country’s financial architecture.