…N758bn pension bond approved to settle accrued rights

The Federal Government has pledged to implement the Minimum Pension Guarantee, a provision of the Pension Reform Act 2014 that has remained unimplemented for more than 11 years, in a move aimed at strengthening retirement security and protecting low-income pensioners from poverty.
President Bola Ahmed Tinubu, who announced the commitment on Thursday, also disclosed that he had approved a N758 billion Federal Government Pension Bond to settle outstanding accrued pension rights and strengthen the Pension Protection Fund.
Tinubu who was represented by the Secretary to the Government of the Federation (SGF), Senator George Akume, announced the measures at the inaugural National Pension Week Leadership Summit in Abuja, where he declared that pension benefits were an obligation to workers who had earned them through years of service, rather than a discretionary favour from government.

Themed “Pensions for All: Building a Secure Future Together,” the summit was to draw attention to the need to build a pension system that guarantees a better future for retirees.
The President said, “A pension is not a favour granted by the Government. It is a wage earned, deferred and held in trust. It is a promise. And this administration has resolved that the promise will be kept.”
The planned implementation of the Minimum Pension Guarantee could mark a significant shift in Nigeria’s pension protection framework, particularly for retirees whose accumulated contributions and benefits may be insufficient to provide a basic standard of living in retirement.

However, the President did not specify when the guarantee would take effect, the minimum benefit payable, the eligibility criteria or the funding arrangements for its implementation.
The President acknowledged that his administration inherited pension obligations that had remained unsettled for years, leaving retirees waiting for benefits accrued through their service to the country.
He said the N758 billion pension bond was approved to address the outstanding obligations and reinforce the Pension Protection Fund.

“That was not an accounting exercise. It was an act of restitution to Nigerians who served their country and were made to wait for what they had earned,” the President said.
The President also announced PenCare as part of efforts to address the healthcare needs of low-income retirees, many of whom face rising living costs and medical expenses after leaving active employment.
According to him, the initiative represents a shift towards a pension system that protects retirees’ wellbeing rather than merely accumulating savings during their working years.

Tinubu described an effective pension system as both a social protection mechanism and a driver of economic development under the Renewed Hope Agenda.
He said pension funds could mobilise long-term domestic savings, deepen financial markets and provide capital for productive investment, including infrastructure and enterprise development.
But he cautioned that the deployment of pension assets for national development must not compromise the financial security of contributors.

Every investment, he said, must satisfy rigorous risk-and-return requirements and serve the interests of pension contributors.
“Preservation without growth is a slow erosion. Retirement savings that fail to keep pace with inflation quietly betray the very people who saved them,” the President warned.
He charged the National Pension Commission (PenCom) to enforce pension regulations firmly and fairly, insisting that compliance with the law must not be compromised.

The President also warned employers in the public and private sectors against deducting pension contributions from workers’ salaries without remitting the funds to the appropriate pension accounts.
“To deduct a worker’s contribution and fail to remit it is not an administrative lapse. It is a breach of trust,” he said.
He urged Pension Fund Administrators and Pension Fund Custodians to strengthen their investment expertise, diversify portfolios responsibly and reduce management costs, stressing that their performance should be judged by the retirement benefits contributors eventually receive rather than the size of assets under management.

Tinubu also called for broader pension coverage beyond the formal employment sector, urging stakeholders to develop practical ways of enrolling traders, artisans, farmers, transport workers and self-employed Nigerians.
He identified the Personal Pension Plan and new distribution channels as potential instruments for extending retirement savings opportunities to workers outside conventional employer-based arrangements.
“Pensions for All must mean exactly that: all,” he said.

The President challenged state governments, organised labour, employers and other stakeholders to expand pension coverage, improve contribution compliance and ensure that the summit produced measurable outcomes.
These, he said, should include increased enrolment, faster payment of benefits, stronger investment performance and improved disclosure across the pension industry.

“The true measure of our success will not be how much money the system holds. It will be how much security, and how much dignity, it delivers,” he said.
He added: “Above all, no Nigerian who has served this nation will be forgotten in retirement. Nigeria will keep faith with those who kept faith with Nigeria.”