By Damilola Benjamin
With over half a million retirees depending on monthly pension payments, the Federal Government’s N334.54 billion contributory pension provision in the 2026 budget is reinforcing retirement security nationwide while sustaining one of Nigeria’s most resilient financial sectors.
The allocation, contained in the 2026 budget proposal recently submitted to the National Assembly, is designed to cover the government’s statutory pension contributions for 674 federal Ministries, Departments, and Agencies (MDAs), including parastatals, universities, teaching hospitals, and security agencies.
Stakeholders, who spoke on the development over the weekend, said the size and spread of the provision underscore the Federal Government’s recognition of contributory pension as a critical pillar of fiscal discipline, social protection, and long-term domestic savings.
A breakdown of the figures shows that the Nigeria Police Force accounts for the single largest allocation, with N73.67 billion earmarked for its contributory Pension obligations. This forms part of the Police’s broader N1.302 trillion budget for 2026, which covers salaries, pensions, and operational costs.
The Nigeria Security and Civil Defence Corps (NSCDC) follows with N15.49 billion set aside for pensions, within its total budget of N244.26 billion, while the Nigeria Correctional Service is allocated N8.46 billion for pension contributions out of a total N198.85 billion envelope.
Similarly, agencies are also captured under the scheme, reflecting the wide net of the contributory pension system. The National Agriculture Development Fund (NADFUND) is allocated N830,529 million, while the Nurse Tutor Programme, Akoka, Lagos, receives N1.49 million for pension contributions.
Beyond the line items, analysts say the N334.54 billion provision carries broader implications for Nigeria’s pension industry, which has grown into one of the largest pools of long-term capital in Africa. Total pension assets have now surpassed N25 million, a milestone that has improved liquidity in the system and reduced delays in the payment of retirement benefits.
Industry data show that the allocation strengthens confidence for the more than 552,000 retirees currently drawing benefits under the Contributory Pension Scheme (CPS). With adequate funding provided for 2026, retirees are better assured of timely and uninterrupted monthly pension payments, while newly retiring workers can access their lump-sum benefits without prolonged waiting periods.
The sector’s growth trajectory remains robust. As of October 2025, total pension assets rose to N26.66 trillion, representing a 2.19 per cent month-on-month increase from N26.09 trillion in September, and a 21.63 per cent year-on-year expansion. This performance came despite a challenging macroeconomic environment marked by high inflation, foreign exchange olatility and capital market uncertainty.
Operators attribute this resilience largely to prudent asset allocation and sustained confidence in Federal Government securities. Pension Fund Administrators (PFAs) have continued to rebalance portfolios toward safer and more liquid instruments, helping to preserve value and ensure steady returns for contributors.
Federal Government securities remain the dominant asset class in pension portfolios, accounting for 59.86 per cent of total pension assets. Holding in these instruments grew by 1.35 per cent month0on0month to N15.96 trillion in October, reinforcing their role as the backbone of pension investments and a key source of funding for the government.
The data also point to steady growth in participation. Retirement Savings Account (RSA) registrations increased from 10.93 million in September to 10.97 million in October, reflecting ongoing enrolment of formal sector employees as well as contributors under the micro-pension scheme.
For the pension industry, the 2026 allocation is more than a routine budgetary line; it is a policy statement. By marking provision for contributory pensions across hundreds of MDAs, the Federal Government is reinforcing the credibility of the CPS, supporting retirement security for workers, and sustaining a critical pool of long-term capital that underpins Nigeria’s financial markets and economic development.
