The Federal Government has unveiled a N400bn Pension Protection Fund to guarantee a minimum monthly pension of N52,500 for 173,209 vulnerable retirees under the Contributory Pension Scheme (CPS).
Director-General of the National Pension Commission (PenCom), Omolola Oloworaran, disclosed this on Tuesday in Abuja, describing the fund as a major step towards implementing a long-standing provision of Nigeria’s pension reform framework.
The initiative, launched under the Presidential Pension Security Initiative, is aimed at improving the welfare of retirees whose pension earnings have become insufficient to meet basic needs following rising living costs and healthcare expenses.
According to Oloworaran, the minimum pension guarantee, originally envisaged under the 2004 pension reform, had remained largely unimplemented for 22 years due to the absence of dedicated funding.
She said some retirees currently receive monthly pensions of slightly above N20,000, leaving them struggling to afford food, medication and other essential expenses.
Oloworaran explained that the N52,500 threshold was determined through an actuarial assessment and would be reviewed periodically to ensure its adequacy and sustainability.
She said the 173,209 prospective beneficiaries comprised 34 per cent of Federal Government retirees, 12 per cent of state government retirees and 54 per cent of private-sector pensioners.
Expressing concern over the situation of private-sector retirees, she disclosed that more than 65 per cent of them currently receive monthly pensions below the proposed minimum threshold.
She appealed to private-sector employers to contribute to the Pension Protection Fund, noting that the Federal Government and the pension industry had already made financial commitments to the initiative.
“The Federal Government has put its money into this fund. The pension industry has put its money into this fund as well. The offering basket for the Pension Protection Fund is now on the private sector’s table. Please do not let it pass empty,” she said.
The PenCom DG also disclosed that the pension industry had committed more than N7bn to provide healthcare support for low-income retirees under the PenCare initiative.
She said the programme had facilitated the payment of health insurance premiums for nearly 30,000 retirees, while the remaining funds were being held in a dedicated account.
The healthcare intervention is expected to ease the financial burden on vulnerable pensioners by improving access to medical services and reducing out-of-pocket healthcare spending.
Oloworaran illustrated the challenges facing low-income retirees with the experience of an elderly woman who could not afford prescribed medication because purchasing the drugs would leave her without enough money for food.
Meanwhile, the commission stated that N1.07tn out of more than N2tn in inherited pension liabilities owed by state governments had been cleared.
According to Oloworaran, 13 states had either settled their outstanding legacy pension obligations or had no inherited liabilities, while some had paid at least 80 per cent of their outstanding commitments.
She said the commission was also working to extend pension coverage to millions of Nigerians in the informal sector, including market women, artisans, farmers and self-employed individuals.
To achieve this, PenCom had introduced accredited pension agents to take the scheme to markets, motor parks and other communities, while the Federal Government was developing incentives to encourage participation.
Oloworaran said the target was to bring millions of informal-sector workers into the pension system rather than limit participation to a few thousand people.
In another development, she disclosed that the pension industry was planning to commit $100m to a proposed infrastructure investment programme, with an additional $50m expected from development partners.
She said investment deployment was expected to begin before the end of the first half of 2027.
The proposed programme is expected to provide long-term financing for infrastructure projects while creating opportunities for pension assets to support economic development.
However, the commission acknowledged the need to ensure that such investments deliver sustainable returns, protect contributors’ retirement savings and comply with existing risk-management requirements.
Oloworaran said the broader objective of the Presidential Pension Security Initiative was to strengthen confidence in the pension system and ensure that Nigerians who contributed to national development during their working years could enjoy financial security in retirement.
