A PENSION is a type of retirement benefit, a system designed to provide people with income and financial security after they stop working, usually due to age, disability, or long service. It’s part of a broader concept known as social protection or social security. The purpose is to ensure that workers do not fall into poverty after their working life ends and can live with dignity even when they are no longer earning wages.
Why Laws ILO Conventions Mandate Pension Plans
Pension systems are not just optional benefits, they are legal and moral obligations under labour and social protection laws. The main reasons are: Protection Against Old-Age Poverty: Without pensions, retirees lose their primary source of income and can easily fall into poverty. Laws ensure that workers have sustained income security after retirement.
The CPS was designed to ensure transparency and sustainability by mandating joint contributions from employers and employees into individual Retirement Savings Accounts (RSAs). However, a critical component of the transition, the settlement of accrued pension rights under the old DBS, was mishandled. These accrued rights, representing pre-2004 entitlements, were to be redeemed through pension bonds, as established under Section 39 of the Pension Reform Act (PRA) 2014, via the Federal Government Retirement Benefits Bonds Redemption Fund.
In Nigeria, the legal framework for pension are the Constitution and the Pension Reform Act 2014; Social Justice and Dignity: Work is a contribution to society; therefore, workers deserve to retire in dignity. Pension laws reflect the principle of social justice — that economic progress should also ensure the welfare of those who contributed to it.
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International Standards (ILO Conventions)
ILO promotes pensions as part of the right to social security. Key conventions include: ILO Convention No. 102 (1952) – Social Security (Minimum Standards) Convention, which sets minimum standards for old-age, invalidity, and survivors’ benefits. ILO Convention No. 128 (1967), that deals with Invalidity, Old-Age, and Survivors’ Benefits Convention, reaffirms the right of workers and their dependents to receive income in old age or in case of invalidity or death; and ILO Recommendation No. 202 (2012) – Social Protection Floors. This Recommendation urges all countries to guarantee at least a basic level of income security for the elderly.
These instruments obligate states, and through national laws, employers, to contribute to systems that prevent vulnerability and social exclusion among the aging population.
Nigeria 2004 Pension Reforms
Nigeria’s pension reform was heralded in 2004 as a turning point in safeguarding the dignity and welfare of retirees. The Contributory Pension Scheme (CPS) was introduced to correct the inefficiencies, corruption, and unsustainable liabilities of the old Defined Benefit Scheme (DBS). Yet, over two decades later, thousands of federal public service retirees remain trapped in a cycle of neglect, unpaid entitlements, and diminishing livelihoods.
Yet, since the first cohort of CPS retirees in 2007, the Federal Government and the National Pension Commission (PenCom) have failed to define or implement the GMP. Consequently, many pensioners survive on stipends as low as ₦20,000 per month, an amount that falls far below the national minimum wage and is grossly inadequate amid spiraling inflation.
At the heart of this failure lies successive federal governments persistent unwillingness or inability to comply with extant pension laws. This deliberate noncompliance has undermined the objectives of the Pension Reform Acts of 2004 and 2014, violated constitutional guarantees, and inflicted severe economic and psychological hardship on retirees who served the nation with commitment and integrity.
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CPS: Promise and Betrayal
The CPS was designed to ensure transparency and sustainability by mandating joint contributions from employers and employees into individual Retirement Savings Accounts (RSAs). However, a critical component of the transition, the settlement of accrued pension rights under the old DBS, was mishandled. These accrued rights, representing pre-2004 entitlements, were to be redeemed through pension bonds, as established under Section 39 of the Pension Reform Act (PRA) 2014, via the Federal Government Retirement Benefits Bonds Redemption Fund.
Successive administrations have failed to fund this redemption mechanism adequately. As a result, retirees are often compelled to wait for one to two years, sometimes longer before receiving their earned benefits. This delay not only violates the PRA 2014 but also offends the principles of equity and social justice enshrined in the Nigerian Constitution. For many retirees, these delays translate into hunger, inability to afford medical care, and premature death.
This recurring failure is not merely an administrative lapse, it constitutes a breach of statutory duty and a profound betrayal of the social contract between the state and its workers.
Pension Increases: A Constitutional Obligation, Not a Policy Option
Section 173(3) of the Constitution of the Federal Republic of Nigeria (1999, as amended) provides unequivocally that:
“Pensions shall be reviewed every five years or together with any Federal Civil Service salary reviews, whichever is earlier.”
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This constitutional guarantee is reinforced by Section 39(3) of the PRA 2014, which mandates periodic pension reviews to maintain parity between retirees and serving officers. Despite this, successive federal governments have consistently excluded pensioners under the CPS from pension adjustments granted to their counterparts under the DBS.
This discriminatory practice offends the principle of equality before the law and effectively punishes those who retired under a supposedly “reformed” system. The failure to extend pension increases to CPS retirees constitutes a flagrant violation of constitutional rights and negates the very rationale of pension reform, to ensure fairness, equity, and protection against inflation.
Guaranteed Minimum Pension: A Promise Deferred
The Guaranteed Minimum Pension (GMP) is one of the most fundamental protections embedded in both the repealed Pension Reform Act 2004 (Section 71) and the PRA 2014 (Section 84). It mandates that retirees who have contributed for the stipulated minimum period must receive a pension that guarantees a basic standard of living.
The plight of Nigeria’s public service retirees stands as a sobering indictment of successive federal governments’ indifference to the rule of law and human dignity. Each unpaid pension bond, each unimplemented review, and each delayed benefit represents a violation of constitutional duty and a betrayal of national trust.
Yet, since the first cohort of CPS retirees in 2007, the Federal Government and the National Pension Commission (PenCom) have failed to define or implement the GMP. Consequently, many pensioners survive on stipends as low as ₦20,000 per month, an amount that falls far below the national minimum wage and is grossly inadequate amid spiraling inflation.
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This inaction represents a dereliction of statutory duty by both PenCom and the federal government. It undermines the legislative intent of the PRA 2014, which sought to shield retirees from poverty. The continued absence of the GMP framework is not just administrative negligence, it is a legal and moral failure that reduces the promise of pension reform to empty rhetoric.
The Human Cost of Legal Non-compliance
The consequences of these persistent failures are devastating and multifaceted:
- Financial Hardship: Retirees are forced into destitution while awaiting benefits that are rightfully theirs. Many resort to borrowing, selling property, or engaging in menial labour to survive.
- Healthcare Deprivation: Without steady income, retirees cannot access necessary medical care, leading to worsening health and avoidable deaths.
- Psychological Trauma: The anxiety, humiliation, and hopelessness associated with unpaid pensions inflict deep emotional and psychological wounds on elderly citizens.
- Erosion of Trust in Government: Continued noncompliance with pension laws undermines public confidence in both the CPS and the sincerity of government reforms.
- Demoralization of the Workforce: Serving public officers now view retirement with dread, not dignity, knowing that their years of service may end in neglect.
Legal and Moral Imperative for Reform
The pension crisis is not merely an economic or bureaucratic issue, it is a constitutional, legal, and ethical crisis. The federal government’s repeated disregard for the PRA 2014, constitutional provisions, and pensioners’ welfare constitutes a continuing breach of Nigeria’s social justice obligations under both domestic and international law, including Article 18 of the African Charter on Human and Peoples’ Rights, which obliges states to protect the elderly.
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The plight of Nigeria’s public service retirees stands as a sobering indictment of successive federal governments’ indifference to the rule of law and human dignity. Each unpaid pension bond, each unimplemented review, and each delayed benefit represents a violation of constitutional duty and a betrayal of national trust.
Any Renewed Hope for Pensioners Under the Tinubu Administration?
The administration of President Bola Ahmed Tinubu, GCFR, has brought renewed hope to pensioners and retirees within Nigeria’s federal public service. In keeping with the government’s “Renewed Hope Agenda,” the administration has taken decisive and commendable steps to address long standing pension liabilities, improve the welfare of retirees, and strengthen the sustainability of the Contributory Pension Scheme (CPS).
Restoring Confidence
The renewed confidence began in November 2024, when the Federal Government released ₦44 billion to settle accrued pension rights of federal retirees in Ministries, Departments, and Agencies (MDAs). According to the National Pension Commission (PenCom), this release covered retirees who exited service between March 2023 and September 2023.
This intervention was a major relief to affected retirees who had waited months for their entitlements, and it signaled the government’s commitment to restoring dignity and trust in the pension administration process.
N758 Billion Pension Bond: A Landmark Decision
Further demonstrating this commitment, on February 5, 2025, the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, announced that the Federal Executive Council (FEC) had approved the issuance of a ₦758 billion bond.
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This landmark policy initiative is aimed at clearing the backlog of pension liabilities under the CPS, an issue that had accumulated over several years. The bond issuance represents a forward thinking approach to addressing pension deficits in a sustainable and transparent manner.
The Pension Protection Fund (PPF)
In a statement released by PenCom on February 28, 2025, the Commission confirmed that the Federal Government had allocated ₦107 billion to the Pension Protection Fund (PPF), from where the Guarantee Minimum Pension (GMP) will be paid. This allocation, drawn from the ₦758 billion pension bond, is designed to enhance the financial security of low-income retirees under the CPS. The Director-General of PenCom, Omolola Oloworaran, explained that this initiative underscores the administration’s recognition of the economic pressures faced by vulnerable pensioners and reflects the government’s commitment to equity in retirement benefits.
Beyond the PPF, the ₦758 billion pension bond also includes ₦253 billion to settle accrued pension rights for retirees from treasury-funded MDAs, as well as ₦388 billion to clear outstanding pension increases dating back to 2007. These measures affirm the administration’s resolve to make pension payments fair, up-to-date, and responsive to prevailing economic realities.
Gratuity Framework for Civil Servants
In a further step toward comprehensive pension reform, on June 13, 2025, the Head of the Civil Service of the Federation (HCSF), Mrs. Didi Esther Walson-Jack, met with the Director-General of PenCom, Omolola Oloworaran, to discuss a proposed Gratuity Framework for civil servants in treasury-funded MDAs under the CPS.
The Tinubu administration has taken bold and commendable steps toward restoring the dignity and economic security of Nigeria’s pensioners. By addressing long-standing arrears, introducing protective mechanisms for low-income retirees, and initiating reforms toward a gratuity framework, the administration has indeed rekindled renewed hope for pensioners and retirees.
This initiative aligns with Section 4(4)(a) of the Pension Reform Act (PRA) 2014, which provides for the design of additional benefits (such as gratuity) to supplement retirement savings. If successfully implemented, this framework will restore a crucial benefit that many civil servants have long desired and will further demonstrate the administration’s genuine concern for the welfare of public servants.
Timely Bond Issuance and Sustained Funding
While these policy pronouncements are commendable, it is imperative that the ₦758 billion pension bond be issued and implemented without delay. Pensioners and retirees continue to await the settlement of arrears from pension increases and accrued rights.
To prevent this initiative from becoming another rhetorical promise, the Federal Government must prioritize the immediate disbursement of the bond proceeds and ensure that all administrative and regulatory bottlenecks are removed.
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Furthermore, it is essential that the Federal Government institutionalizes regular budgetary provisions for pension liabilities in subsequent fiscal years. Sustainable pension funding should be embedded in the national budget framework to prevent the reemergence of backlogs. The inclusion of pension obligations as a statutory expenditure line will help maintain the current momentum and secure retirees’ confidence in the long term.
Conclusion
The Tinubu administration has taken bold and commendable steps toward restoring the dignity and economic security of Nigeria’s pensioners. By addressing long-standing arrears, introducing protective mechanisms for low-income retirees, and initiating reforms toward a gratuity framework, the administration has indeed rekindled renewed hope for pensioners and retirees.
However, the fulfillment of these initiatives will ultimately be measured by timely execution, sustained fiscal discipline, and continued prioritization of retirees’ welfare. The issuance of the approved pension bond and the consistent funding of pension obligations will ensure that this renewed hope is not only felt but also sustained across generations of Nigerian public servants.
Comrade Takor was a two-term President of NASU, a two-term National Treasurer of NLC and an inaugural member of the Board of PenCom. Takor retired as a Director in federal service and is now a legal practitioner based in Lagos. He is an alumnus of the National Institute of Policy and Strategic Studies (NIPSS), Kuru-Jos, Plateau State. He is currently the Vice Chairman/Chairman Human Rights Committee of Nigerian Bar Association (NBA), Epe Branch.
