The Katsina State Government has revealed significant progress in addressing long-standing gratuity arrears owed to retired civil servants, with plans to settle outstanding payments totaling over N20 billion.
Massive Debt Clearance Initiative
During a media presentation of the newly enacted 2025 Pension Reform Law on Friday, the Chairman of the State and Local Government Pension and Gratuity Committee, Dr Farouk Aminu, confirmed that verification processes for liabilities accumulated between September 2023 and October 2025 are nearly complete.
Dr Aminu emphasized that Governor Dikko Umar Radda has committed to releasing the funds immediately after the verification exercise concludes. This development follows the state's previous payment of ₦23 billion to clear arrears from the fourth quarter of 2019 to August 2023, which was described as a turning point in pension system reforms.
Transforming Retirement Benefits System
The government is implementing comprehensive measures to ensure that retiring civil servants receive their gratuities within the same month they retire, marking a significant departure from previous delays that sometimes stretched for years.
The fresh commitment to offset an additional ₦20 billion reinforces the government's determination to dismantle the backlog that has long burdened retirees and distorted the financial stability of pension management in the state, Dr Aminu stated during the briefing.
New Pension Reform Law Introduces Dual Structure
The newly introduced 2025 Pension Reform Law establishes a dual-structure contributory pension model designed to ensure sustainable, well-funded, and timely payment of retirement and death benefits for employees of both the state and local governments.
Under the new system, two pension schemes will operate simultaneously:
- Contributory Defined Benefits Scheme (CDBS): Both government and employees contribute to a pooled fund managed by licensed Pension Fund Administrators
- Pure Contributory Pension Scheme (CPS): Monthly contributions flow into individual Retirement Savings Accounts
The reform mandates a 20 percent combined monthly pension contribution, split between government and employees, which officials say was crafted to guarantee a stable funding base for the next three decades.
Transition arrangements protect existing pensioners and workers with five years or less before retirement, who will remain under the old defined benefits plan, while workers with more than five years remaining will transition into the contributory scheme.
This comprehensive approach aims not only to clear outstanding liabilities but also to transform the entire retirement architecture, ensuring that every worker who leaves service receives their gratuity promptly and predictably.
