FG Releases ₦5.12bn to Clear Pension Arrears for Over 90,000 Retirees

The Federal Government has announced the disbursement of ₦5.12 billion to settle pension arrears owed to 90,689 retirees under the Defined Benefit Scheme (DBS), marking a significant step towards fulfilling long-standing obligations to senior citizens who served the nation before the introduction of the Contributory Pension Scheme in 2004.

The payment, coordinated by the Pension Transitional Arrangement Directorate (PTAD), reflects the administration’s commitment to improving the welfare of pensioners in line with President Bola Tinubu’s Renewed Hope Agenda, which prioritises the needs of the elderly and vulnerable groups.

According to PTAD’s Executive Secretary, Dr Chioma Ejikeme, the funds cover arrears for verified pensioners across various sectors, including the parastatals, police, and civil service categories. The directorate confirmed that ₦2.21 billion was paid to parastatal pensioners, ₦1.49 billion to retired police officers, and ₦1.42 billion to civil service retirees. Dr Ejikeme explained that the beneficiaries were identified through a comprehensive biometric verification process designed to eliminate ghost pensioners and ensure that only genuine retirees benefit from the payments. She emphasised that the directorate has invested significant effort in cleaning up pensioners’ records, digitising payment systems, and enhancing transparency in pension administration.

The announcement was met with relief and appreciation from pensioners’ unions across the country. Leaders of the National Union of Pensioners commended the government for honouring its commitment to retirees, noting that while many pensioners had endured long delays and financial hardship, the new payments represent progress towards restoring confidence in the pension system. Some union officials, however, pointed out that the delay in settlement had cost some retirees the chance to enjoy their entitlements in their lifetime, calling for more proactive and regular payments to avoid a repeat of such situations. Retirees themselves expressed mixed feelings, with many thankful for the relief but also urging the government to implement measures that would ensure prompt monthly disbursements in the future.

The DBS, which caters to public service employees who retired before the 2004 pension reform, remains a major financial obligation for the government. Unlike the Contributory Pension Scheme, the DBS is funded entirely from the treasury, making timely payments dependent on budgetary allocations. Over the years, the system has faced numerous challenges, including incomplete records, cumbersome verification processes, and the persistent problem of ghost pensioners. PTAD, established in 2013 to oversee the DBS, has since embarked on a series of reforms aimed at addressing these challenges, including centralising pension payments, introducing biometric verification, and automating disbursements to reduce fraud and inefficiency.

Dr Ejikeme noted that the directorate’s work has already saved the government billions of naira by removing fictitious entries from the pension payroll. She reiterated that PTAD will continue verification exercises, both in-person and online, to ensure accuracy and inclusion of all genuine pensioners. Mobile verification teams have also been deployed to reach retirees in remote areas, particularly those unable to travel for registration due to health or mobility challenges. She added that the directorate is committed to building a pension administration system that is both transparent and sustainable, ensuring that retirees are paid without unnecessary delays.

The Ministry of Finance has assured that the payment of ₦5.12 billion is not an isolated event but part of a broader plan to ensure consistent and timely settlement of pensions. A senior ministry official stated that the government intends to maintain a regular monthly payment schedule to prevent the accumulation of arrears, thereby protecting retirees from the uncertainty and hardship associated with delayed payments. The official also confirmed that the ministry is working closely with PTAD and the Office of the Accountant-General of the Federation to enhance automation in payment processes, ensuring that pensions are credited directly to beneficiaries’ accounts with minimal human intervention.

Public finance analysts have welcomed the disbursement as a positive development but caution that sustaining such payments will require strong fiscal discipline and adequate budgetary planning. They argue that while the government has demonstrated a willingness to address pension arrears, maintaining this momentum is essential to fully restore the confidence of retirees in the pension system. Some have suggested that the government explore additional revenue sources or savings mechanisms to fund DBS obligations without straining other critical budgetary commitments.

For many of the beneficiaries, the payment is more than just a financial transaction—it represents recognition for their years of service to the country. Retirees across different states have spoken about how the funds will help them meet essential needs such as healthcare, rent, and daily living expenses. In rural areas, where many DBS pensioners reside, the payment is expected to have a ripple effect on local economies, providing a boost to small-scale businesses and community trade.

While challenges remain in pension administration, the clearance of ₦5.12 billion in arrears has been widely seen as a step in the right direction. Pensioners and their representatives have expressed hope that the government will not only sustain timely payments but also continue to refine the system for greater efficiency and fairness. As the DBS winds down over time with the continued expansion of the Contributory Pension Scheme, stakeholders believe that lessons learned from its administration can help shape a more robust and reliable pension system for future generations.

In the meantime, for the 90,689 retirees who have now received long-awaited payments, the disbursement is a tangible reminder that persistent advocacy, combined with targeted reforms, can yield results. The hope among pensioners is that such progress will become the standard, not the exception, ensuring that those who have served the nation can retire with dignity and financial security.