The Negative Power of Ignorance vs. The Positive Impact of Knowledge
Across Nigeria’s pension system, a silent financial game unfolds—one that costs contributors millions while benefiting those who know how to exploit the system. Fixed deposit placements and budget delay tactics serve as key tools in this financial play, leaving retirees with losses they never saw coming.
While pension contributors wait for returns on their lifetime savings, parts of their pension funds are quietly placed in fixed deposit accounts for weeks. The generated millions in interest are never accounted for, benefiting select financial players while contributors get delayed or reduced payouts.
At the same time, pensioners suffer another painful blow: delays in the implementation of both the new and old pension schemes, falsely blamed on the non-passage of the budget (Appropriation Bill). However, this excuse doesn’t hold up under scrutiny.
The Fixed Deposit Manipulation: How Pension Contributors Lose Millions
Pension Fund Administrators (PFAs) control trillions of naira in retirement savings, yet they engage in a hidden strategy that outstrips contributors:
Instead of immediately investing funds in approved portfolios, they park large sums in fixed deposit accounts for short-term interest gains.
If ₦1 trillion is temporarily placed in a 10% per annum fixed deposit, the interest generated in just two weeks exceeds ₦3.8 billion.
This money, instead of being returned to contributors or used to increase pension benefits, is often redirected into undisclosed financial channels.
Meanwhile, the Nigerian Pension Operators Association (PenOp)—tasked with protecting pension contributors—often stays silent, allowing this financial outflow to continue unchecked.
The Budget Delay Excuse: Why It’s a Smokescreen
Beyond fixed deposit schemes, retirees are also subjected to policy manipulations that delay their pension payments. The recent excuse? Pension implementation must wait for budget passage.
This claim is misleading for several reasons:
1. Budget Approvals Do Not Dictate Pension Implementation
A budget is merely a projection—a paper representation of planned revenues and expenditures.
Pension payments are statutory obligations and do not require budget passage unless adjustments to pension figures are proposed.
Since the new pension template had already been approved and arrears settled, a budget delay should not hinder its implementation.
2. FAAC Has Already Shared Funds for Pensions
The Federation Account Allocation Committee (FAAC) distributes actual revenue to federal and state governments monthly.
By mid-January 2025, FAAC had already shared funds, meaning the government had sufficient resources to meet pension obligations.
FAAC allocations deal with real, available cash, while budgets are only forecasts.
3. The President Can Authorize Pension Payments Before Budget Passage
The Nigerian Constitution empowers the President to spend a significant portion of the previous year’s budget before the new budget is passed.
The 2022 Budget Delay
When the 2022 Appropriation Bill faced legislative delays, the government continued funding critical obligations, including pensions and salaries, under presidential authority.
This precedent proves that pension disbursement is not dependent on budget passage.
The Power of Knowledge: Why Retirees and Contributors Must Take Action
Knowing how FAAC allocations work exposes false excuses for pension delays.
Understanding fixed deposit schemes helps contributors demand greater transparency.
Recognizing government spending powers ensures that retirees do not suffer unnecessary delays.
The continued manipulation of pension funds and payment timelines underscores the negative power of ignorance and the urgent need for financial literacy.
Retirees and contributors must hold PenOp, PFAs, and the government accountable to ensure their savings are managed ethically and disbursed fairly.
Stay Informed, Stay Ahead
The Ameh News—Unmasking the Hidden Realities of Nigeria’s Pension System.
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