President Tinubu’s exit benefits scheme: A new social contract for Nigerian workers

Think of the teacher who spent three decades shaping young minds, the nurse who worked through countless difficult nights, and the civil servant who gave a lifetime to public service. For each of them, retirement should arrive as a season of dignity, security and peace of mind, not as a descent into uncertainty. Nations are judged, in the end, not by how they treat their strongest citizens, but by how they honour those who have spent their working years in service and now depend on society’s promise of care in old age.

It is against this backdrop that the Federal Government’s recent approval of an exit benefits scheme for retiring Federal civil servants stands as one of the most significant social protection measures introduced in recent years.

For the first time since the introduction of the Contributory Pension Scheme (CPS), retiring federal government workers will receive an additional retirement benefit equivalent to 100 percent of their total annual emoluments upon retirement, alongside their accrued pension savings and retirement benefits under the CPS. Effective from 1 January 2026, the scheme applies to officers in treasury-funded ministries, extra-ministerial departments and agencies who have completed at least ten years of service.

This is a landmark intervention.

It strengthens retirement security, improves retirement outcomes and reinforces the fundamental objective of every pension system: ensuring that workers who have devoted their productive years to service can retire with confidence and dignity.

Importantly, this approval also settles, once and for all, a misconception that has persisted since the introduction of the CPS in 2004. The CPS was never designed to prevent employers from providing additional retirement benefits to their employees. Rather, it established a sustainable minimum framework upon which employers could build more generous retirement arrangements. The Pension Reform Act expressly permits employers to establish additional benefit schemes for their workforce. What the federal government has now done is demonstrate leadership by showing how that provision can be used to strengthen worker welfare and retirement security.

Just as importantly, this is a promise built to be kept. To safeguard the funds and guarantee transparency, a dedicated exit benefits scheme account is being maintained with the Central Bank of Nigeria, ring-fenced for this single purpose and managed by the National Pension Commission as the sole repository of the funds. The Office of the Accountant General of the Federation will transfer approved funds into that account for onward disbursement through retirees’ pension fund administrators, who are directed to pay beneficiaries within ten working days. This architecture matters. It ensures the benefit is not left to the shifting pressures of the budget cycle and that the retiring officer can plan with confidence, knowing the framework that protects their entitlement is institutional and accountable.

This is why the significance of the Exit Benefits Scheme extends far beyond the Federal Civil Service. It establishes an important national precedent. It sends a clear message that retirement protection should not end with monthly pensions alone, and it affirms that employers can and should do more to support workers who have spent decades contributing to organisational success and national development.

For this reason, state governments across Nigeria should carefully study this initiative and consider adopting similar arrangements for their workers. Many states have made remarkable progress in implementing the Contributory Pension Scheme. But retirement security is not merely about compliance with minimum statutory requirements. It is about creating outcomes that genuinely improve the quality of life of retirees. A retiring worker in Enugu, Kano, Lagos, Rivers, Abia or Yobe deserves the same opportunity to transition into retirement with dignity and financial security.

Likewise, Nigeria’s private sector should view this development not as a cost, but as an investment in people. The most successful organisations in the world recognise that workforce welfare does not end at retirement. Competitive retirement packages have become an important tool for attracting talent, retaining institutional knowledge and building organisational loyalty. Workers who know that their employers genuinely care about their future tend to be more productive, more committed and more invested in the success of the enterprise. Additional retirement benefits should therefore become a central part of corporate Nigeria’s human capital strategy.

At its core, this is not simply a pension issue.

It is a social security issue. It is a human dignity issue. It is a nation-building issue.

Every society eventually makes a choice about how it treats those who have spent decades building it. Some leave retirees to navigate old age alone. Others deliberately create systems that ensure retirement is not accompanied by anxiety, hardship and financial vulnerability. The federal government has chosen the latter path.

In recent months, a series of decisions has demonstrated a clear commitment to strengthening the welfare of workers and retirees. The approval and disbursement of ₦758 billion to clear all outstanding pension liabilities, some dating back to 2007. The introduction of Pension Boost 1.0, which raised aggregate monthly pension payments under the CPS by more than 40 percent, easing the pressure of inflation on hundreds of thousands of retirees. The restoration of zero waiting time for the payment of accrued pension rights, ending the multiple-month delays that had long confronted many retiring federal government employees. And now the Exit Benefits Scheme. Each of these points in a single direction.

They reflect a government that recognises that economic reform must ultimately improve the lives of ordinary Nigerians. At a time when many workers and retirees are navigating the pressures of a changing economic environment, such measures offer reassurance that the government remains attentive to their welfare and determined to strengthen the social safety net.

History will likely record that President Bola Ahmed Tinubu’s administration did not merely preserve Nigeria’s pension system; it actively sought to strengthen it. Indeed, a compelling case is emerging that President Tinubu is determined to cement his legacy as the most worker-friendly and retiree-focused president in Nigeria’s history.

Not through rhetoric, but through tangible action.

Through policies that put real resources behind the welfare of workers. Through decisions that honour years of service. Through interventions that recognise that retirement security is not a privilege but an obligation owed to those who have built the nation.

The introduction of the Exit Benefits Scheme, therefore, deserves recognition not simply as a pension policy but as a statement of national values. It reminds us that the true measure of progress is not only how much wealth a nation creates but also how faithfully it protects the people who helped create it.

The task before us is now clear. The federal government has led. State governments must follow. The private sector must seize the opportunity.

Together, we must keep building a Nigeria where every worker can look forward to retirement not with fear, but with hope. Because after a lifetime of service, dignity should never be negotiable.

Omolola Oloworaran is the director general of the National Pension Commission (PenCom), Nigeria’s pension regulator.