Federal Government to Float ₦758 Billion Bond to Offset Pension Liabilities Before October, Says PenCom

The Federal Government is preparing to float a ₦758 billion bond before the first week of October to settle outstanding pension liabilities, the National Pension Commission (PenCom) has disclosed. The planned bond issuance, which has already secured Federal Executive Council approval, is expected to address the backlog of accrued pension rights and other obligations owed to retirees under the Contributory Pension Scheme (CPS) as well as legacy schemes. According to PenCom, the initiative represents a decisive step in resolving years of delayed payments that have caused financial hardship for many retirees. The Commission explained that the proceeds from the bond will be used to pay accrued rights — estimated at over ₦253 billion — in addition to other pension arrears that have accumulated across ministries, departments, and agencies of government. PenCom’s Director-General, Omolola Oloworaran, stated that the forthcoming bond will serve as a “landmark intervention” to restore credibility to the nation’s pension system. She emphasised that the Commission has worked closely with the Ministry of Finance, the Accountant-General’s office, and the Debt Management Office (DMO) to ensure a seamless issuance and disbursement process. The bond is expected to be raised from the domestic debt market, with the DMO tasked with structuring the issuance in a way that attracts institutional investors, including pension fund administrators, without creating distortions in the market. Analysts note that while the intervention is necessary to bring relief to pensioners, the government must carefully manage the fiscal impact, given Nigeria’s rising domestic debt obligations. Pensioners’ groups have welcomed the development, describing it as long overdue. They pointed out that thousands of retirees have waited years to receive their full entitlements and urged the government to guarantee transparency and accountability in deploying the bond proceeds. Stakeholders also called for reforms to prevent a recurrence of arrears, warning that another build-up of pension liabilities could erode trust in the system. Observers believe that settling these liabilities will not only provide relief to affected retirees but also strengthen confidence in the Contributory Pension Scheme, reduce the burden of litigation on government, and stabilise the wider pension industry. However, they also stressed that strong oversight is required to ensure the funds reach beneficiaries as promised. With PenCom confirming that the bond will be issued before October, attention is now focused on how swiftly the government can move from issuance to disbursement. For retirees who have endured years of uncertainty, the success of this initiative could mark a turning point in Nigeria’s management of pension obligations.