The Federal Government has cleared ₦758 billion in inherited pension liabilities dating back to 2007, providing financial relief to 957,045 beneficiaries and marking a major intervention in Nigeria’s pension system.

The liabilities were settled through a ₦758 billion intervention bond, according to the Director-General of the National Pension Commission (PenCom), Omolola Oloworaran.

Oloworaran disclosed the development at the 2026 PenCom Media Conference in Lagos, saying the intervention cleared pension obligations accumulated across several administrations.

The settlement forms part of broader reforms aimed at reducing delays in retirement benefits, strengthening the Contributory Pension Scheme and improving financial security for retirees.

Pension Backlog Dating to 2007 Cleared

According to PenCom, some of the outstanding pension obligations had remained unresolved for nearly two decades.

The commission said clearing the liabilities would provide long-awaited relief to retirees and beneficiaries who had experienced delays in accessing their entitlements.

Beyond settling the backlog, the Federal Government has also taken steps to prevent another accumulation of unpaid pension obligations.

Accrued pension rights for federal employees expected to retire up to December 2029 have already been credited directly to their Retirement Savings Accounts following a one-time verification and enrolment exercise.

The move is intended to improve predictability in retirement planning and ensure that eligible public-sector workers have access to their benefits when they leave service.

Pension Processing Drops From 21 Months to 48 Hours

PenCom has also introduced a Zero Waiting Time Policy aimed at aligning retirement benefit payments with the monthly public-service salary cycle.

Under the reforms, benefit-processing turnaround time has been reduced from as long as 21 months to about 48 hours.

The commission said the policy is designed to eliminate lengthy financial gaps between an employee’s final salary and the commencement of retirement benefits.

For retirees, faster processing could improve financial stability during the transition out of active employment, while strengthening confidence in the country’s pension system.

Monthly Pension Payments Rise to ₦14.83bn

The government has also increased pension payments under the Contributory Pension Scheme through its Pension Boost 1.0 initiative.

Monthly disbursements increased from ₦12.15 billion to ₦14.83 billion, benefiting more than 241,000 retirees nationwide.

PenCom also reviewed payments for retirees under the defunct Nigeria Social Insurance Trust Fund scheme.

The review, the first in 21 years, resulted in an average increase of 1,173 per cent for 2,116 retirees, while ₦8.7 billion in accumulated arrears was settled.

The developments represent a significant increase in retirement-related cash flows to beneficiaries and could provide additional financial support to households affected by rising living costs.

PenCom Pushes States to Strengthen Pension Systems

PenCom said it is also engaging state governments to expand participation in the Contributory Pension Scheme and improve the adequacy of benefits paid to retirees.

The commission wants more states to adopt the scheme while ensuring existing pension payments better reflect economic conditions, including inflation.

The effort is expected to address disparities in pension administration between federal and state-level workers.

93% of Nigerian Workers Operate in Informal Sector

Despite progress in the formal pension system, PenCom identified Nigeria’s large informal economy as one of the biggest challenges facing pension coverage.

About 93 per cent of the country’s workforce, representing approximately 84.92 million people, operates in the informal sector.

However, only 242,690 people were enrolled in the Personal Pension Plan as of July 2026.

This leaves an estimated pension coverage gap of 99.71 per cent among informal-sector workers.

The figures are particularly significant because the informal economy contributes an estimated 58 to 65 per cent of Nigeria’s gross domestic product.

Women also face a substantial coverage challenge, with PenCom reporting that about 96 per cent of employed women work in the informal sector.

Personal Pension Plan Targets Traders and Gig Workers

PenCom is seeking to close the gap by expanding its Personal Pension Plan for self-employed Nigerians, traders, artisans, farmers, gig workers and other individuals outside conventional employer-based pension arrangements.

The scheme allows participants to make flexible daily, weekly or monthly contributions through channels including USSD, mobile money and direct bank transfers.

Contributions are divided between funds that can be accessed under specified conditions and savings reserved for retirement.

To expand distribution, PenCom accredited six pension agents in 2026 to support enrolment and transaction processing across underserved communities.

The commission, however, acknowledged that increasing registration alone would not guarantee retirement security, as contributors must continue saving consistently over the long term.

PenCare to Target 30,000 Low-Income Retirees

PenCom also announced additional welfare measures aimed at strengthening financial and social protection for retirees.

Among them is PenCare, a free healthcare support programme expected to begin with 30,000 low-income retirees.

The commission is also working towards activating a statutory Minimum Pension Guarantee, designed to establish a baseline level of pension income for eligible retirees.

Together with the expansion of personal pension products, the initiatives indicate a shift towards broadening Nigeria’s retirement system beyond workers in conventional salaried employment.

The settlement of the ₦758 billion legacy liabilities represents a major step in addressing longstanding weaknesses in the pension system. However, expanding coverage to Nigeria’s vast informal workforce remains one of the industry’s biggest challenges.

With millions of traders, artisans, farmers and gig workers still outside formal retirement savings arrangements, the next phase of Nigeria’s pension reforms will depend increasingly on whether the industry can turn wider access into consistent long-term savings.