Stakeholders Urge Reform Of Pension Act To Boost Lump Sum Payouts

Pension stakeholders and civil servants have intensified calls for the National Pension Commission (PenCom) to accelerate a review of the Pension Reform Act (PRA). In interviews conducted in Abuja on Wednesday, February 18, 2026, contributors expressed concern that current withdrawal limits hinder their ability to achieve financial independence after service.

Mr. Simon Uzor, a civil servant retiring next year, argued that retirees should have greater access to their savings to fund post-career businesses, noting that the current “small amounts” often vanish before any meaningful investment can be made.

Under the existing legal framework of the Contributory Pension Scheme (CPS), the PRA provides clear provisions for the withdrawal of lump sum benefits once a contributor reaches retirement age.

The Act stipulates that a retiree is entitled to access a portion of their Retirement Savings Account (RSA) balance, provided that the remaining funds are sufficient to sustain a programmed withdrawal or an annuity. This mandatory “residual balance” ensures that the retiree receives a steady monthly pension for life, a safeguard meant to prevent elderly poverty.

Despite these safeguards, many retirees find the current implementation restrictive. Mr. Ojo Ibrahim shared that his lump sum was quickly depleted by immediate family expenses like school fees and rent, leaving nothing for business capital.

While advocates like Mr. Sani Mustapha of COPEHRA clarify that the lump sum is not a fixed rate but is determined by life expectancy and total RSA balance, workers like Mr. Usman Musa suggest a 50 percent minimum threshold. As PenCom oversees the implementation of these rules, the growing consensus among stakeholders is that the Act must be modernized to reflect the current economic landscape and the practical needs of the Nigerian retiree.