Tinubu Government Offsets ₦758bn Pension Backlog
Atume Terfa
The Federal Government under President Bola Ahmed Tinubu has moved to close a painful chapter in Nigeria’s pension history, approving the release of ₦758 billion to settle long-standing pension arrears while stepping up enforcement against employers who fail to remit workers’ contributions.
The breakthrough was revealed by the National Pension Commission (PenCom) during its one-year performance review, where the commission confirmed that pension recoveries rose by 180 per cent in 2025, reflecting a tougher compliance regime and a renewed commitment to protecting retirees.
PenCom Director-General, Omolola Oloworaran, said the funding has wiped out pension liabilities dating back to 2007, including unpaid increments and accrued rights inherited from earlier pension structures. She described the intervention as one of the most far-reaching clean-ups since the launch of the Contributory Pension Scheme, restoring confidence among retirees who had waited years for full entitlements.
The ₦758 billion settlement was financed through a federal government bond designed to plug long-standing funding gaps in the pension system. According to PenCom, the move has allowed the government to settle obligations that had remained unresolved for nearly two decades, particularly cases involving delayed adjustments and incomplete contribution histories.
Since the intervention, pension administration has seen a marked turnaround. PenCom says benefit processing has become significantly faster, with retirees who complete documentation now receiving payments almost immediately, ending the prolonged delays that once defined the system.
A substantial portion of the funds went toward pension increases, with over ₦362.7 billion already paid to about 9.1 million retirees across the country. Other disbursements addressed accrued rights for early CPS retirees, cleared contribution shortfalls from previous years, settled special obligations such as those owed to federal university professors, and strengthened the Pension Protection Fund, which supports retirees with low balances. To cushion the impact of rising living costs, PenCom also introduced Pension Boost 1.0, adding roughly ₦2.68 billion to monthly pension payments under the CPS.
Alongside the financial intervention, enforcement has been ramped up. Between January and November 2025, PenCom recovered ₦4.04 billion from defaulting employers, a sharp rise from the ₦1.44 billion recovered throughout 2024. The commission attributes the surge to stricter compliance rules, including the tighter application of Pension Clearance Certificates for access to government contracts and regulatory approvals.
The reforms form part of a broader transformation drive known as Pension Revolution 2.0, which seeks to modernise pension administration through full digitalisation, introduce healthcare support for vulnerable retirees under the PenCare initiative, expand coverage for informal sector workers by converting the Micro Pension Scheme into a Personal Pension Plan, and enforce tougher governance standards for pension fund operators.
PenCom says the goal extends beyond settling old debts, aiming instead to build a pension system that is transparent, inclusive and resilient, capable of guaranteeing dignity and financial security for Nigerians in retirement.
