Retirees across Nigeria are celebrating a significant financial intervention as the National Pension Commission (PenCom) has successfully disbursed a massive N577.26 billion to more than 1.05 million Retirement Savings Accounts (RSAs). The payment, drawn from a Federal Government bond, marks a critical step in resolving long-standing pension arrears under the Contributory Pension Scheme (CPS).
Breaking Down the N577 Billion Disbursement
Usman Musa, Head of PenCom’s Management Services Department, revealed the details at the 2025 PenCom Media Conference in Abuja. He confirmed that the payments were sourced from the N758 billion Federal Government bond approved earlier in the year specifically to settle outstanding pension liabilities.
"In total, the payout of N577,264,960,890 has already hit the RSAs of retirees and pension contributors. This has directly impacted 1,053,000 Retirement Savings Accounts," Mr. Musa stated. He further confirmed that the entire N758 billion bond had been released to the commission.
The disbursement addressed two key areas. Firstly, N387 billion of the bond was allocated for pension increases, with N362.7 billion already paid out. Secondly, PenCom remitted N107 billion to correct a 2.5% pension contribution shortfall by the federal government between 2017 and 2021. This correction directly benefited the RSAs of 750,232 contributors.
Security Sector Retirees and Enhanced Compliance
A substantial portion of the funds was directed towards retirees from the security sector. Notably, 32% of the N354 billion paid so far, which amounts to N132 billion, was disbursed to retirees from the Nigeria Police Force.
PenCom's Director-General, Omolola Oloworaran, hailed the bond approval as a landmark intervention in Nigeria's pension administration. "This bond sends a clear signal that pension obligations will no longer be ignored," she said, emphasizing the government's commitment to clearing backlogs and restoring confidence in the CPS.
In a related development to improve retirees' welfare, PenCom introduced Pension Post 1.0. This initiative has added N2.68 billion to the monthly pension payments of CPS retirees since June 2025. "These are not just numbers. They are meals on tables, medicine bought, debts settled, and dignity preserved," Ms. Oloworaran remarked.
Stricter Enforcement Leads to Sharp Rise in Recoveries
Alongside the disbursement, PenCom strengthened its compliance framework in 2025. A key policy linked the issuance of Pension Clearance Certificates to participation in major financial transactions. Companies without valid certificates are now barred from conducting business with Pension Fund Administrators, custodians, and leading banks.
This stricter enforcement has yielded impressive results. Pension recoveries skyrocketed to N4.04 billion between January and November 2025, a dramatic increase from the N1.44 billion recovered in all of 2024. A significant chunk, N2.06 billion, was recovered in the third quarter alone. "This clearly demonstrates that when compliance is tied to real economic consequences, behaviour changes," the DG noted.
The 2004 Contributory Pension Scheme was established to replace a failing defined-benefit system. While it brought more transparency, funding shortfalls led to persistent arrears. The February 2025 approval of the N758 billion bond by the Federal Executive Council was designed to fully settle these liabilities, including accrued rights, increases since 2007, and specific shortfalls for university professors.
In a separate but related trend, data shows that about 300,000 RSA holders have switched their Pension Fund Administrators in the last five years, leveraging the scheme's portability feature to move a total of N1.26 trillion between different fund managers.
