Federal Govt proposes N1.38tr for pensions this year

The Federal Government has proposed N1.376 trillion for pensions, gratuities and retirees’ benefits in this year’s  Appropriation Bill currently before the National Assembly.

The subheads under which the pensions, gratuities and other reliefs for retirees are captured are: Office of the Head of Civil Service (Civilian Pension) N94,538,656,847; Military Pensions and Gratuity (DMP), N486,039,965,366; National Health Insurance Scheme(NHIS) – Military Retirees, N3,571,846,330; Defence Intelligence Agency (DIA) Civilian Staff Pension and Gratuity, N6,610,178,920 and  Department of State Security, N28,611,520,421.

Others are the Nigeria Intelligence Agency, N23,538,022,433; Pension Transitional Arrangement Directorate, N285,586,345,534; Police Pensions and Gratuities, N18,533,472,973; Customs, Immigration and Prisons Pension Office, N18,409,612,175 and  Universities Pension, Including Arrears, N13,120,357,752.

 Parastatals Pension and Railway Pensions are projected to consume N194,686,375,535; NELMCO, 17,548,870,129; National Pension Commission (PENCOM), N427,039,429,838  and other pensions N20,964,110,103.

 The figures show the Bola Ahmed Tinubu administration’s effort to meet rising obligations to retired public servants and address long-standing arrears across civil, military and paramilitary institutions.

 The proposal shows that N94.54 billion has been set aside under the Office of the Head of the Civil Service of the Federation for civilian pensions. This includes N60.34 billion for the payment of pensions, N109.77 million for gratuities and N1.02 billion for pension running costs.

The government also earmarked N2.5 billion to address unfunded pension liabilities and  N30.58 billion for the settlement of pension increment arrears relating to 2024.

Military pensions and gratuities account for a significant portion of the allocation, with the Defence Military Pensions office expected to receive N486.04 billion.

Within this amount, N237.25 billion is provided for pensions and gratuities, while N130.38 billion is allocated for expected retirees. Death benefits are projected at N98.53 billion, alongside N3.09 billion for administrative charges.

 Additional provisions include N7.57 billion for medical retirees, N3.96 billion for arrears of gratuities between January 2019 and December 2021;  N2.27 billion for pension arrears within the same period and N2.98 billion for outstanding death benefits.

The bill also proposes N3.57 billion for National Health Insurance Scheme(NHIS) contributions for military retirees, including arrears.

For the civilian staff of the Defence Intelligence Agency, N6.61 billion is proposed for pensions and gratuities, comprising N824.53 million for pensions and N4.28 billion for gratuities. Administrative charges, including verification, training and skill acquisition programmes, are estimated at N1.50 billion.

The DSS is allocated N28.61 billion, largely driven by N27.63 billion for pensions, including N763.88 million as pension running costs. The sum of  N221.71 million is provided for verification exercises.

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The NIA is to receive N23.54 billion, covering N15.45 billion for pensions and dependants’ benefits; N1 billion for pension running costs and N7.09 billion for gratuity and long service severance packages.

The Pension Transitional Arrangement Directorate is allocated N285.59 billion, reflecting the continuing financial burden associated with legacy pension schemes. Of this amount, N23.29 billion is proposed for the implementation of newly approved pension rates.

Police pensions and gratuities are estimated at N18.53 billion, with N18.32 billion earmarked for pensions and N213.56 million for pension running costs. The Customs, Immigration and Prisons Pension Office is allocated N18.41 billion, including N15.56 billion for pensions, N222.29 million for running costs, N80.13 million for gratuities and death benefits as well as  N2.55 billion for pensions of retired Comptrollers-General and Deputy Comptrollers-General.

 Under universities’ pensions, including arrears, the government proposed N13.12 billion, all of which is dedicated to pension payments.

Parastatals and railway pensions together account for N194.69 billion, comprising N105.66 billion for pensions, N1.73 billion for running costs and N87.29 billion to address unfunded liabilities.

The Nigerian Electricity Liability Management Company is allocated N17.55 billion for pensions and arrears.

The National Pension Commission-related provisions total N427.04 billion. This includes N32.9 billion for the payment of gratuities to civil servants, N62.25 billion for payments into the Redemption Fund and N233.71 billion for the Pension Protection Fund.

A further N67.72 billion is proposed to cover pension increases arising from the 2024 consequential adjustment. The bill also provides N16.17 billion to address the 2.5 per cent shortfall in employer pension contributions for omitted tertiary institutions between April 2017 and December 2021. It also has a provision of    N14.28 billion for the payment of benefits of retired professors and outstanding shortfalls between 2012 and 2016.

Other pension-related provisions amount to N20.96 billion. This includes N10.51 billion for the benefits of retired Heads of Service and Permanent Secretaries, N1 billion for severance benefits to retired heads of government agencies and parastatals, and N2.3 billion for the entitlements of former Presidents, Heads of State, Vice Presidents and former Chiefs of General Staff.

In addition, N7.16 billion is proposed for outstanding retirement benefits and length of service allowances for the Economic and Financial Crimes Commission(EFCC) covering 2023, 2024 and 2025.

The scale of the pension allocation in the 2026 budget proposal reflects the Federal Government’s effort to meet statutory obligations to retirees while gradually clearing accumulated arrears across multiple sectors, even as fiscal pressures continue to shape spending priorities.