The National Pension Commission (PenCom) has approved a massive 1,173% increase in pensions for retirees under the Nigeria Social Insurance Trust Fund (NSITF), bringing to an end a 21-year freeze that left many beneficiaries struggling with severely eroded incomes due to inflation.
The approval was disclosed on Wednesday by PenCom’s Director-General, Ms Omolola Oloworaran.
The decision affects 2,116 retirees and raises combined monthly pension payments from N12.56 million to N159.95 million. On an individual level, some retirees who had been receiving as little as N18,000 per month will now earn about N206,000, representing a dramatic improvement in post-retirement welfare.
In addition to the monthly increases, PenCom also approved the payment of N8.70 billion in pension arrears. This translates to an average lump-sum payout of about N3 million per beneficiary, with some retirees set to receive over N8 million, depending on their individual entitlements and length of underpayment.
What PenCom is saying
PenCom described the adjustment as the first pension increase for NSITF beneficiaries since 2005 and framed it as a long-overdue correction of regulatory and structural failures.
According to the Commission, the stagnant pension regime persisted despite clear constitutional and statutory provisions requiring periodic reviews of pensions.
“This is the first pension increase for NSITF beneficiaries since 2005, and it is a long-overdue correction of structural injustice within the legacy scheme. The arrears cover years of underpayment caused by regulatory non-compliance and failure to align pensions with economic realities,” Oloworaran said.
PenCom added that it invoked Section 53 of the Pension Reform Act 2014 to enforce compliance after years of violations, signalling a shift from discretionary adjustments to firm, law-backed regulatory enforcement.
Backstory: two decades of frozen pensions
NSITF retirees had been stuck on a frozen pension structure for over two decades, even as Nigeria went through repeated inflationary cycles and cost-of-living shocks.
Under both the Pension Reform Act and the 1999 Constitution, pensions are meant to be reviewed at least once every five years or in line with adjustments to Federal Civil Service salaries. NSITF policy also stipulates that minimum retirement pensions should not fall below 80% of the prevailing National Minimum Wage.
Despite these safeguards, pensions remained unchanged from 2005, creating a widening gap between retirees’ incomes and economic realities. PenCom said the prolonged freeze effectively pushed many private-sector retirees into poverty and amounted to a deep structural inequity that required direct regulatory intervention.
Fund growth makes adjustment possible
PenCom said the scale of the increase was supported by significant growth in the NSITF Fund over the years.
According to the Commission, the fund expanded from N54 billion in 2005 to N195 billion as of December 2025. This growth, achieved through what PenCom described as prudent fund management under strict regulatory oversight, provided the financial capacity to absorb higher monthly payouts and the one-off arrears settlement.
The Commission stressed that the adjustment does not compromise the long-term sustainability of the fund. Instead, it demonstrates that pension adequacy and fiscal responsibility can coexist when governance structures function effectively.
Why this matters
The decision restores dignity to thousands of retirees who endured more than two decades of stagnant pensions despite legal guarantees of periodic reviews.
By lifting monthly payments more than tenfold and clearing arrears, PenCom is directly addressing old-age poverty among affected private-sector pensioners. It also sends a strong signal about tougher regulatory enforcement, showing PenCom’s willingness to correct long-standing non-compliance using the tools provided by the Pension Reform Act.
More broadly, the move strengthens confidence in Nigeria’s pension system, illustrating how sound fund management and regulatory reforms can translate into real welfare gains for retirees who waited decades for relief.
What you should know
PenCom has directed Trustfund Pensions Limited, the administrator of NSITF legacy assets, to submit a comprehensive enhancement proposal strictly aligned with statutory requirements.
The Commission also approved the deployment of the “VerifyMe” digital solution to automate pensioner revalidation. This replaces physically demanding verification exercises that often exposed elderly retirees to stress and travel costs.
PenCom said payments have already been made to verified NSITF retirees under the new structure, adding that the digital system has improved service delivery, reduced exclusion errors, and forms part of broader efforts to modernise pension administration and protect beneficiaries’ rights.
Emmanuel Bassey is a Financial Expert that has worked in the Banking and Finance Industry for over 15+ years across different banks in Nigeria
