The Federal Government’s decision to earmark ₦334.54 billion for contributory pension payments in the 2026 Appropriation Bill has drawn cautious optimism from economic and financial experts, who say the allocation reinforces confidence in Nigeria’s pension system but must be backed by strict fiscal discipline and timely remittances.
The provision, contained in the budget proposal submitted to the National Assembly, will fund pension contributions across 674 federal government agencies, including ministries, departments and agencies (MDAs), parastatals, universities, teaching hospitals, and security institutions.
Security Agencies Dominate Pension Allocation
A breakdown of the budget shows that security agencies account for the largest share of the pension vote, reflecting their size and strategic importance.
The Nigeria Police Force tops the list with ₦73.67 billion allocated for contributory pensions, forming part of its broader ₦1.302 trillion 2026 budget covering salaries, pensions, and operational costs.
The Nigeria Security and Civil Defence Corps (NSCDC) follows with ₦15.49 billion, drawn from its ₦244.26 billion total allocation, while the Nigeria Correctional Service received ₦8.46 billion for pension contributions out of its ₦198.85 billion budget.
Smaller agencies were also captured in the pension vote, including the National Agriculture Development Fund (NADFund) with ₦830,529, and the Nurse Tutor Programme, Akoka, Lagos, which received ₦1.49 million.
Economist: Allocation Boosts Confidence, But Execution Is Key
Speaking on the development, Celestine Ukpong, an economist, described the ₦334.54 billion pension provision as a “strong signal of policy continuity” at a time of fiscal pressure.
“Pensions are a long-term social contract. By clearly providing for contributory pensions in the 2026 budget, the government is sending a message that retirees will not be abandoned, even in a tight fiscal environment,” Ukpong said.
However, he cautioned that budgetary allocations alone are not enough. According to him, the real test lies in timely releases and consistent remittances to pension fund administrators.
“Delayed remittances weaken confidence and distort investment planning within the pension ecosystem. The credibility of this allocation will depend on execution, not just numbers on paper,” he added.
Chartered Accountant: Pension Assets Cushion Fiscal Risks
Also reacting, Peter Adebayo, FCA, said the growing size of Nigeria’s pension assets provides a critical buffer for both retirees and the broader financial system.
“With pension assets now above ₦26 trillion, the contributory pension scheme has become one of the most stable pillars of Nigeria’s financial architecture,” Adebayo noted.
He explained that the dominance of Federal Government securities, which account for nearly 60% of pension assets, has helped shield the system from market volatility.
“That conservative asset mix has protected retirees’ funds during periods of inflation, exchange rate instability, and capital market uncertainty. But government must also ensure that borrowing from the pension pool does not crowd out private sector credit,” he warned.
Pension System Remains Resilient
Industry data show that Nigeria’s total pension assets rose to ₦26.66 trillion in October 2025, representing a 2.19% month-on-month increase and a 21.63% year-on-year growth, despite macroeconomic challenges.
Experts attribute this resilience to prudent asset rebalancing, improved regulation, and sustained confidence in Federal Government instruments, which stood at ₦15.96 trillion as of October.
Growing Enrolment, Rising Obligations
The number of Retirement Savings Accounts (RSAs) also continues to climb, increasing from 10.93 million in September to 10.97 million in October, driven by new formal sector workers and expanding micro-pension participation.
Analysts say this steady growth underscores the need for consistent government funding, as rising enrolment translates into higher future pension obligations.
Outlook for 2026
With over 552,000 retirees currently benefiting from the contributory pension scheme, experts agree that the ₦334.54 billion allocation offers reassurance of timely and uninterrupted pension payments in 2026—provided fiscal discipline is maintained.
As the National Assembly reviews the budget, stakeholders will be watching closely to see whether the Federal Government matches its pension promises with prompt releases, ensuring that Nigeria’s pension system remains a cornerstone of social and financial stability.
Nigeria’s 2026 budget allocates ₦334.54bn to contributory pensions across 674 agencies. Experts Celestine Ukpong and Peter Adebayo, FCA, assess what it means for retirees, fiscal discipline, and pension sustainability.
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