PTAD defends pension policy despite retirees’ protest

The Pension Transitional Arrangement Directorate (PTAD) in Nigeria is currently defending its pension policy amidst protests from retirees of the defunct Assurance Bank. The core of the dispute revolves around the application of recent pension increments, specifically a N32,000 flat-rate increase approved by President Bola Tinubu in 2024. PTAD clarifies that while many Defined Benefit Scheme (DBS) pensioners received this increment, retirees from certain defunct agencies, including Assurance Bank, were instead covered by a separate percentage-based review, entitling them to increases of 10.66% and 12.95%. This article examines the legal framework underpinning pension adjustments in Nigeria, PTAD's mandate, and the implications of this differentiated policy for affected retirees.

The landscape of pension administration in Nigeria is once again under scrutiny, following protests by former employees of the defunct Assurance Bank Plc. These retirees have voiced strong grievances against the Pension Transitional Arrangement Directorate (PTAD), alleging discriminatory practices in the application of recent pension increments. The focal point of their discontent is their exclusion from a N32,000 flat-rate pension increase, which they contend is a national welfare package applicable to all federal pensioners.

PTAD, the government agency responsible for managing the Defined Benefit Scheme (DBS), has, however, maintained that its policy is consistent with extant regulations. The Directorate asserts that while a N32,000 increment was approved for a category of pensioners, the Assurance Bank retirees, along with others from specific defunct agencies, were subject to a distinct percentage-based review. This article delves into the legal and regulatory framework governing pension adjustments in Nigeria, analyzing PTAD's position and the constitutional and statutory provisions that shape pension entitlements, particularly for those under the Defined Benefit Scheme.

Nigeria's pension system has undergone significant reforms, transitioning from a largely unfunded Defined Benefit Scheme (DBS) to a Contributory Pension Scheme (CPS) with the enactment of the Pension Reform Act (PRA) 2004, subsequently repealed and re-enacted as the Pension Reform Act 2014. The Pension Transitional Arrangement Directorate (PTAD) was established under Section 42 of the Pension Reform Act 2014 as an extra-ministerial department within the Federal Ministry of Finance. Its primary mandate is to manage the pensions of federal government retirees under the old DBS, specifically those who retired on or before June 30, 2007, and did not transition to the CPS.

The legal basis for pension reviews in Nigeria is firmly rooted in the 1999 Constitution of the Federal Republic of Nigeria (as amended). Section 173(3) of the Constitution explicitly mandates that pensions for federal public servants shall be reviewed every five years or concurrently with any Federal Civil Service salary reviews, whichever occurs earlier. This constitutional provision underscores the government's commitment to ensuring that pensioners' benefits are periodically adjusted to reflect economic realities and maintain their purchasing power. PTAD operates under the oversight of the National Pension Commission (PenCom), which is empowered by Section 48 of the PRA 2014 to issue rules, regulations, and directives to PTAD to ensure timely and accurate pension payments.

The current dispute highlights the complexities inherent in administering a transitional pension scheme, particularly when different categories of pensioners are subject to varying adjustment policies. PTAD's defense rests on the distinction between a general N32,000 flat-rate increment and a separate percentage-based review. According to PTAD, the exclusion of Assurance Bank retirees from the N32,000 increment is not arbitrary but is based on specific directives from the National Salaries, Incomes and Wages Commission (NSIWC).

Specifically, PTAD cites NSIWC Circular Ref. No. SWC/S/04/S.542/III/461, dated September 27, 2024, which expressly exempts pensioners of Peoples Bank of Nigeria, Assurance Bank, Nigeria Reinsurance, NICON Insurance, and NITEL/MTEL from the N32,000 pension increment. Instead, these particular groups were covered by another NSIWC Circular, Ref. No. SWC/S/04/S.557/T/233, dated November 24, 2024, which approved pension increases of 10.66% and 12.95% for them. PTAD has stated that it disbursed N5.09 billion to 11,205 eligible DBS pensioners from these affected institutions in December 2025, representing a 50% payment of arrears arising from these percentage increases. Furthermore, PTAD has confirmed the full settlement of N32,000 pension increment arrears for other eligible DBS pensioners.

From a legal perspective, the constitutional mandate under Section 173(3) of the 1999 Constitution (as amended) requires periodic pension reviews. The issue then becomes whether the differentiated application of increments, based on NSIWC circulars, constitutes a fair and lawful implementation of this constitutional provision. Retirees' arguments of discrimination and receiving pensions below N10,000 monthly, significantly less than the N32,000 minimum threshold, raise concerns about the adequacy and equity of the current policy. While PTAD is bound by directives from the NSIWC, the legal challenge for affected pensioners would likely center on whether these circulars, in their differentiated application, violate the spirit or letter of Section 173(3) or any other anti-discrimination provisions, or if they create an unfair disadvantage contrary to Section 173(2) which states that benefits shall not be withheld or altered to a person's disadvantage except as permissible by law.

The liquidation of Assurance Bank decades ago also adds a layer of complexity, with retirees questioning the fate of the bank's assets and their impact on pension liabilities. The legal framework for handling pension obligations of defunct private entities absorbed into the public scheme, especially those under PTAD's purview, requires careful examination to ensure that the rights of these pensioners are not prejudiced due to historical corporate failures.

The ongoing protests by Assurance Bank retirees underscore the critical need for clear, consistent, and equitable pension policies, particularly for those under the Defined Benefit Scheme. While PTAD asserts adherence to NSIWC circulars that differentiate between fixed and percentage-based pension increments for various groups, the perception of discrimination among retirees warrants further attention. The constitutional imperative for periodic pension reviews, as enshrined in Section 173(3) of the 1999 Constitution, demands that all adjustments are not only legally compliant but also fair and adequate to sustain pensioners' livelihoods.

Practitioners advising retirees should meticulously review the specific NSIWC circulars (Ref. No. SWC/S/04/S.542/III/461 and Ref. No. SWC/S/04/S.557/T/233) and the Pension Reform Act 2014 to ascertain the precise legal basis for the differentiated treatment. Potential avenues for legal recourse could involve challenging the NSIWC circulars themselves on grounds of constitutional inconsistency or discrimination, or seeking judicial interpretation of what constitutes a 'review' under Section 173(3) in the context of disparate increments. Moving forward, greater transparency from pension administrators and regulatory bodies, coupled with robust stakeholder engagement, will be crucial in fostering trust and ensuring that the welfare of all pensioners is adequately protected.