FG begins ₦1.1bn exit-benefit payments to 175 retirees

The Federal Government has begun disbursing additional retirement benefits to former federal civil servants under its new Exit Benefit Scheme, paying about ₦1.1 billion to 175 retirees between January and August 2026.

The National Pension Commission (PenCom) disclosed this in a statement, saying the payments were made to retirees of Treasury-funded Ministries, Departments and Agencies (MDAs) under the scheme, which became effective on January 1, 2026.

The development marks the first implementation of the Federal Government’s new additional-benefit framework, which is designed to provide eligible retirees with a payment separate from their normal pension benefits under the Contributory Pension Scheme (CPS).

Under the scheme, federal civil servants who have served for at least 10 years are eligible for an exit benefit equivalent to 100 per cent of their total annual emolument at retirement, subject to the applicable requirements.

PenCom said the Federal Government made ₦32.90 billion available in the 2026 Appropriation for the scheme and had so far released ₦12.3 billion into the dedicated Exit Benefit Scheme Account maintained with the Central Bank of Nigeria.

The ₦1.1 billion already paid therefore represents less than 10 per cent of the funds released to the dedicated account, indicating that further disbursements are expected as eligible retirees complete the verification and approval process.

PenCom said the additional payment is separate from the accumulated balance in a retiree’s Retirement Savings Account (RSA) under the CPS.

Eligible retirees are required to submit documentation, including clearance letters and recent payslips, to their Pension Fund Administrators (PFAs). The PFAs verify the records before forwarding them to PenCom for validation and approval.

Once approved, the exit benefit is credited to the retiree’s RSA through the PFA, after which the PFA transfers the full amount to the retiree’s designated salary account.

The process is being implemented in collaboration with the Office of the Head of the Civil Service of the Federation, Office of the Accountant-General of the Federation, PFAs and other relevant stakeholders.

The scheme creates an additional layer of retirement protection at a time when the Federal Government is also working to address outstanding pension liabilities and improve the administration of retirement benefits.

PenCom has simultaneously been modernising pension administration. In February 2026, it launched the Data Recapture Self-Service Platform, allowing RSA holders to update biodata and biometric information remotely, with the aim of reducing incomplete records, delays and congestion at PFA offices.

The Commission is also reviewing the Pension Reform Act 2014, including a proposal to increase statutory pension contribution rates. Under the current framework, employers contribute a minimum of 10 per cent of monthly emoluments while employees contribute 8 per cent, giving a combined minimum contribution of 18 per cent.

The expansion of retirement benefits also comes against rising pension-sector inflows. PenCom data showed that public-sector pension contributions increased 234.85 per cent to ₦550.96 billion in Q4 2025, contributing to total pension contributions of ₦903.7 billion during the quarter.

The latest Exit Benefit Scheme payments therefore represent more than a one-off intervention for 175 retirees. They signal the beginning of a broader federal commitment to providing an additional financial cushion for eligible public servants at retirement.

The key test now is the speed and consistency with which the remaining funds in the Exit Benefit Scheme account are converted into payments for eligible retirees, while maintaining effective verification and transparency throughout the process.