The National Pension Commission (PenCom) has approved the payment of N8.70bn in pension arrears to 2,116 retirees under the defunct Nigeria Social Insurance Trust Fund (NSITF) Scheme, ending a 21-year period without any upward pension review for the affected pensioners.
The approval, which also comes with a massive increase in monthly pension benefits, marks one of the most significant pension interventions in Nigeria’s post-reform era and is expected to ease long-standing financial hardship among retirees who exited service before the introduction of the Contributory Pension Scheme.
In a statement issued on Wednesday, PenCom disclosed that the total monthly pension payable to the 2,116 retirees has been increased from N12.56m to N159.95m, representing a 1,173 per cent rise in aggregate monthly payouts.
The Commission noted that the decision was recently approved by its Director-General, Mrs Omolola Oloworaran, as part of broader efforts to enforce compliance with pension laws and restore fairness to legacy pension schemes.
First pension increase since 2005
For many NSITF retirees, the review represents the first adjustment to their pensions since 2005, despite sharp increases in the cost of living, inflationary pressures, and changes in the national minimum wage over the past two decades.
PenCom said the prolonged stagnation in pension benefits had created severe disparities, leaving many retirees on monthly payments that no longer reflected economic realities or statutory requirements.
In one notable case cited by the Commission, a retiree whose monthly pension stood at about N18,000 now earns approximately N206,000, alongside pension arrears exceeding N8m.
According to PenCom, the average arrears paid to each of the 2,116 beneficiaries is estimated at about N3m, providing immediate financial relief to pensioners who have struggled with rising healthcare, housing, and living expenses.
PenCom pays N8.70bn arrears to 2,116 NSITF retirees under landmark review
The Commission explained that the pension enhancement was made possible by the sustained growth of the NSITF Fund, which increased from N54bn at the point of asset transfer in 2005 to N195bn as of December 2025.
PenCom attributed the growth to prudent investment decisions, effective regulation, and strict oversight of fund administrators, which collectively created sufficient financial headroom to implement the long-overdue review without jeopardising the sustainability of the scheme.
“The enhancement reflects the improved financial position of the NSITF Fund and demonstrates that pension obligations can be met when funds are properly managed and regulated,” the Commission said.
Legal basis for the pension review
PenCom emphasised that the review was anchored on clear legal provisions that had remained largely unimplemented for years.
Section 39(3) of the Pension Reform Act 2014, alongside Section 173(3) of the 1999 Constitution (as amended), mandates periodic pension reviews at least once every five years or in line with salary reviews in the Federal Civil Service.
In addition, the NSITF Benefits Payment Policy stipulates that the minimum retirement pension should not fall below 80 per cent of the prevailing national minimum wage.
Despite these provisions, NSITF pensions had not been reviewed since 2005, effectively placing the scheme in prolonged non-compliance with existing laws.
To address this, PenCom invoked Section 53 of the PRA 2014, which requires that benefits under the NSITF Scheme be administered strictly in accordance with its governing rules.
The Commission subsequently directed Trustfund Pensions Limited, the administrator of the scheme, to submit a comprehensive proposal for pension enhancement.
Background to the NSITF Scheme
The NSITF was established in 1993 as the successor to the National Provident Fund, managing pension benefits for private sector employees before Nigeria transitioned to the Contributory Pension Scheme in 2004.
Following the pension reforms, assets under the defunct NSITF Scheme were transferred to Trustfund Pensions Limited, which was mandated to manage the funds and administer benefits to existing retirees and deferred pensioners who did not migrate to the new scheme.
Over time, however, the absence of periodic pension reviews meant that many retirees were left on benefits that steadily lost value amid inflation and economic reforms.
As part of efforts to improve service delivery and reduce the stress associated with pension administration, PenCom approved the deployment of the “VerifyMe” digital platform for the automated revalidation of NSITF pensioners.
The Commission said the digital solution eliminated the need for repeated physical verification exercises, which had often proven burdensome for elderly pensioners.
According to PenCom, payments have so far been made only to verified retirees, with the digital process ensuring accuracy, efficiency, and reduced administrative bottlenecks.
Broader implications for pension reform
Industry observers say the latest intervention sends a strong signal about PenCom’s willingness to enforce compliance across all pension schemes, including legacy arrangements that predate the Contributory Pension Scheme.
The move is also expected to reassure workers and retirees that pension funds, when properly regulated, can deliver long-term value and dignity in retirement.
PenCom reiterated its commitment to protecting pensioners’ rights and ensuring that all retirement benefit schemes operate in line with the law and best global practices.
The Commission added that it would continue to work with pension fund administrators and other stakeholders to address outstanding issues across the pension industry, particularly those affecting vulnerable retirees.
