PenCom will increase NSITF pensions by means of 1,173%, can pay N8.70bn arrears

Editor-in-chiefJanuary 29, 20263 Mins read44

PenCom will increase NSITF pensions by means of 1,173%, can pay N8.70bn arrears

PenCom Approves 1,173% Pension Increase for NSITF Retirees, Releases N8.7 Billion in Arrears

Introduction

In a landmark decision aimed at improving the welfare of Nigerian retirees, the National Pension Commission (PenCom) has approved a massive 1,173% increase in pensions for over 2,100 retirees under the Nigeria Social Insurance Trust Fund (NSITF). This historic move not only boosts monthly pension payments but also releases N8.7 billion in long-overdue arrears, marking the first pension adjustment for NSITF retirees in 21 years.

Key Points

**Pension Increase**: Monthly pension payments for 2,116 NSITF retirees rise from N12.56 million to N159.95 million—a 1,173% boost.
**Arrears Payment**: N8.7 billion in pension arrears distributed, averaging about N3 million per retiree.
**Individual Impact**: Some retirees saw their monthly pensions jump from N18,000 to N206,000, with over N8 million paid in arrears per person.
**Fund Growth**: NSITF Fund grew from N54 billion in 2005 to N195 billion by December 2025, enabling the increase.
**Legal Mandate**: The adjustment aligns with statutory requirements for periodic pension reviews under the Pension Reform Act.

Background

The Nigeria Social Insurance Trust Fund (NSITF) was established in 1993, replacing the National Provident Fund (NPF), to manage pension benefits for private sector employees before the introduction of the Contributory Pension Scheme (CPS) under the Pension Reform Act (PRA) 2004. After the reform, NSITF pension assets were transferred to Trustfund Pensions Limited for administration.

Despite legal provisions requiring pension reviews every five years or in line with federal civil service wage adjustments, NSITF pensions had not been reviewed since 2005. This left retirees facing significant erosion of their benefits due to inflation and rising living costs.

Analysis

Why This Increase Matters

The 1,173% pension hike is more than just a number—it represents a significant policy shift toward honoring commitments to retirees. For decades, NSITF pensioners have struggled with stagnant benefits, many receiving as little as N18,000 monthly, insufficient to meet basic needs.

Economic and Social Impact

– **Improved Living Standards**: The increase directly enhances retirees’ purchasing power, helping them cope with inflation and healthcare costs.
– **Economic Stimulus**: With more disposable income, retirees are likely to spend more, indirectly boosting local economies.
– **Precedent Setting**: This move may encourage similar reviews for other pension schemes, promoting fairness across the board.

Fund Sustainability

The NSITF Fund’s growth from N54 billion to N195 billion demonstrates prudent management and investment under PenCom’s oversight. This financial headroom was crucial in enabling the increase without jeopardizing the scheme’s long-term sustainability.

Practical Advice

For Retirees

– **Verify Payments**: Ensure your pension details are updated with Trustfund Pensions Limited to avoid delays.
– **Financial Planning**: Consider consulting a financial advisor to manage the increased income effectively.
– **Stay Informed**: Keep track of further policy changes or additional benefits announcements.

For Pension Administrators

– **Compliance**: Regularly review pension schemes to ensure adherence to statutory review timelines.
– **Transparency**: Maintain clear communication with retirees about payment schedules and fund status.
– **Investment Strategy**: Continue prudent fund management to sustain future benefit enhancements.

FAQ

**Q: Who qualifies for the pension increase?**
A: The increase applies to 2,116 verified NSITF retirees who were receiving pensions under the old scheme.

**Q: How was the 1,173% increase calculated?**
A: The increase was determined based on statutory provisions, economic conditions, and the need to restore the value of benefits that had eroded over 21 years.

**Q: Will there be more pension reviews in the future?**
A: Yes, the Pension Reform Act mandates periodic reviews at least every five years or in line with federal civil service wage adjustments.

**Q: How can I check if my arrears have been paid?**
A: Contact Trustfund Pensions Limited or visit their official website for payment status updates.

**Q: What if I am an NSITF retiree but haven’t received the increase yet?**
A: Ensure your details are updated with the pension administrator and reach out to them for clarification.

Conclusion

PenCom’s approval of a 1,173% pension increase for NSITF retirees, coupled with the release of N8.7 billion in arrears, is a transformative step toward improving the welfare of Nigeria’s retired workforce. This decision not only addresses decades of stagnation but also sets a precedent for honoring pension commitments. With prudent fund management and adherence to legal mandates, the future looks brighter for retirees under the NSITF scheme.