By Ajibola Olaide, JKNewsMedia Reporter
Federal retirees under the Contributory Pension Scheme (CPS) are set to receive a N32,000 monthly pension increase following the approval of a N758 billion bond by President Bola Ahmed Tinubu to settle all outstanding pension liabilities.
The bond was approved to ensure that pensioners benefit from the National Minimum Wage Amendment Act 2024 and the consequential adjustments.
The N32,000 monthly payment will serve as a baseline pension for retirees in the education and health sectors, as well as security agencies and the Armed Forces under the CPS, irrespective of individual accumulated savings.
On 6 August, President Tinubu directed what he described as the “prompt implementation of long-overdue pension increases and a minimum pension guarantee, which would provide a safety net for the most vulnerable pensioners under the CPS.”
Officials of the National Pension Commission (PenCom) confirmed that with the National Assembly’s concurrence, the bond proceeds would soon be available for disbursement.
One senior official stated that “the pension increases for CPS retirees, and the minimum pension guarantee means setting a baseline amount that every retiree under the Contributory Pension Scheme would receive, no matter how small their accumulated savings are.
This acts as a financial safety net to protect the poorest and most vulnerable retirees from falling into poverty.”
Providing further clarity, PenCom’s Director-General, Omolola Oloworaran, explained how the N758 billion bond will be structured across three major categories to address longstanding issues that have undermined confidence in the CPS.
She said: “N253 billion of the bonds will be dedicated to clearing accrued rights. These are entitlements due to federal workers employed before the CPS commenced in 2004, and those who had about three years to retirement at the time.
This intervention clears the backlog of accrued rights payments and will put an end to the delays in pension disbursements that have caused frustration in recent months.”
Accrued rights are the pension benefits owed to employees who had served under the old Defined Benefits Scheme before the transition to the CPS.
Under the arrangement, the government is responsible for settling these rights before the retiree’s CPS account can be fully activated.
Delays in funding these accrued rights have been a major source of bottlenecks in pension processing, leading to backlogs and complaints from retirees.
Oloworaran noted that the N253 billion allocation was designed to wipe out these delays and bring closure to workers who have waited for years.
On longstanding arrears, she explained that “N387.5 billion will be committed to pension increases dating back to 2007. That is almost two decades of increments left unpaid.
This administration has decided to take the matter seriously and settle all outstanding pension increases from 2007 till date.”
She further highlighted that N107 billion had been earmarked for the Pension Protection Fund, which she described as a dedicated reserve to support the lowest-income retirees.
According to her: “This fund is meant to augment pensions for low-income earners to enable them to earn a living wage.
It is a mechanism built into the CPS to ensure that no retiree falls completely below a defined minimum standard.
This contribution from the federal government will go directly to improving the livelihood of the most vulnerable pensioners.”
The Pension Protection Fund, established under the Pension Reform Act, was designed to provide additional support where retirees’ savings fall below minimum thresholds.
By allocating N107 billion, the government intends to operationalise this fund on a scale that guarantees financial relief to thousands of pensioners living on modest incomes.
Oloworaran stressed that PenCom is working with relevant agencies to complete the bond issuance swiftly. She said: “Once that is done, Pension Fund Administrators (PFAs) will credit retirees’ savings accounts, and retirees will be able to claim their entitlements without delay.
PFAs have committed to prompt payments once funds are available, while PenCom will provide oversight to ensure beneficiaries are paid immediately.”
The Director-General noted that this intervention was central to rebuilding confidence in the CPS. She remarked: “Confidence in the CPS has waned in recent years due to unresolved liabilities.
This payment initiative allows us to rebuild trust and demonstrates that the government is committed to protecting the welfare of ordinary Nigerians.”
With the N758 billion bond now approved, pension industry stakeholders are preparing for its rollout, which is expected to ease long-standing complaints from federal retirees who have endured payment backlogs, delayed adjustments, and inadequate benefits.
The Commission emphasised that the move represented a deliberate effort to restore dignity to pensioners by addressing liabilities that had stretched for nearly two decades.
Meta description: Tinubu approves N758bn bond to clear pension arrears, fund accrued rights, and establish N32,000 minimum pension guarantee for federal retirees under CPS.
