President Bola Tinubu has written to the Nigerian Senate seeking approval for the issuance of Federal Government bonds worth N757.98 billion in the domestic debt market to clear outstanding pension liabilities under the Contributory Pension Scheme (CPS) as of December 2023.
The request, which is to be executed through the Debt Management Office (DMO), is part of the Federal Government’s renewed effort to address growing pension arrears and alleviate the financial hardship faced by retired workers.
In the letter addressed to Senate President Godswill Akpabio, Tinubu explained that the initiative is pursuant to Section 44(1) of the Fiscal Responsibility Act, 2007, which mandates National Assembly approval for all new borrowings.
According to the President, the Pension Reform Act of 2014 outlines several key obligations for the Federal Government, including Provision of accrued pension rights for employees who served prior to the implementation of the Contributory Pension Scheme, setting aside 5% of its monthly wage bill into a Redemption Fund to address past pension liabilities,guaranteeing pension reviews every five years or whenever salaries are reviewed, in line with Section 15(4) of the Act, addressing shortfalls in the Retirement Savings Accounts of university professors, as provided under Section 6(2)and contributing 1% of total Federal Government revenue annually to the Pension Protection Fund as stipulated in Section 80(2).
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President Tinubu acknowledged that the government has struggled to meet these obligations due to persistent revenue challenges.
He added that this has led to accumulated pension arrears and increased financial pressure on retirees.
He emphasized that the Federal Executive Council approved, at its meeting on February 4, 2025, the issuance of bonds in the domestic debt market to settle the outstanding pension liability amounting to N757.98 billion
The proposed bond issuance aims to restore the dignity and welfare of retired federal employees, many of whom have endured long delays in receiving their entitlements.
President Tinubu emphasized that the bond issuance would not only comply with statutory pension obligations but also help stabilize the nation’s retirement system, which plays a crucial role in national development and social security.
The Senate is expected to deliberate on the President’s request in the coming days.
(Editor: Oloyede Oworu)
