FG sets N52,500 minimum pension, 173,209 retirees to benefit

The Federal Government has set a minimum monthly pension of N52,500 for retirees under the Contributory Pension Scheme, with 173,209 pensioners across the public and private sectors expected to receive the benefit.

Omolola Oloworaran, Director-General of the National Pension Commission (PenCom), announced the initiative on Tuesday, November 10, at the launch of the Presidential Pension Security Initiative in Abuja. She said a N400 billion Pension Protection Fund has been created to back the guarantee, which tops up the incomes of retirees earning below the approved threshold.

Some retirees earn just above N20,000

Oloworaran said some pensioners were receiving as little as just above N20,000 per month, making a minimum income floor urgent. The N52,500 figure came from an actuarial review and will be revisited over time.

"The figure was not plucked from the air; it has been validated by an actuary, and it is subject to review. And it is funded," she said.

The PenCom chief said the guarantee fulfils a clause written into the 2004 pension reform law that no previous administration had funded or implemented.

The 173,209 eligible retirees are made up of 34 per cent from the Federal Government, 12 per cent from state governments and 54 per cent from the private sector. Oloworaran raised concern about private-sector retirees, noting that more than 65 per cent of them currently receive pensions below the new floor. She called on private companies to contribute to the fund.

"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.

N7 billion for retiree healthcare

Beyond the pension floor, Oloworaran said the pension industry had raised more than N7 billion to pay health insurance premiums for low-income retirees. The money has covered close to 30,000 pensioners under the PenCare initiative, with the balance held in a dedicated account.

She described an elderly woman who kept a doctor's prescription in her purse because filling it would leave her without money for food, saying the healthcare programme would remove that kind of choice.

On legacy liabilities, she said the Federal Government had helped states clear N1.07 trillion of the more than N2 trillion inherited when the current administration took office. Thirteen states have now settled their pension debts in full or paid at least 80 per cent of what was owed.

Infrastructure push and informal sector

The pension industry is committing $100 million to an infrastructure investment programme, with an additional $50 million expected from development partners. Deployment is targeted before the end of the first half of 2027.

PenCom also plans to extend pension coverage to informal-sector workers, including market traders, artisans and farmers, through accredited agents deployed to markets, motor parks and local communities.

For retirees on the lowest pensions, the N52,500 floor is a direct boost to household spending. For the pension industry, the new fund widens the pool of long-term capital available for infrastructure, though the private sector's contribution remains the open question.