Harmonising Hope: How Nigeria’s DBS Pension Reform Ends Decades of Inequality for Retirees

Imagine two civil servants, Musa and Tunde. Both worked as Assistant Directors for 30 years and retired from the same ministry. Musa retired in 2002 on an old salary structure. 

Tunde retired in 2008 after a pay raise. Despite identical service, Musa got ₦45,000 monthly while Tunde got ₦98,000. 

That gap existed because pensions under the old Defined Benefit Scheme (DBS) were calculated using whatever salary structure was active at retirement. 

Inflation eroded Musa’s pay, and his complaints went unanswered for years.

The new DBS harmonisation changes that. Under the reform, pensions will be recomputed using the latest approved salary structure that existed before the June 2007 DBS cut-off date. 

So Musa and Tunde will now receive similar payouts for the same rank and service, ending a disparity that caused “deep grievances and sustained agitations”. 

*Key Highlights of the Reform*

President Bola Tinubu approved the DBS harmonisation policy in August 2025 for inclusion in the 2026 pension budget. It is being driven by the Pension Transitional Arrangement Directorate (PTAD) as a strategic intervention to restore equity. 

*Who Benefits*

The reform covers federal DBS pensioners only. Specifically:

1. *Pure federal pensioners* whose pensions are fully borne by the Federal Government.

2. *Pensioners under PAPD, DTAPD and TEHPD* who transferred service from federal institutions to state MDAs before retirement.

3. *Retirees whose benefits were computed using salary structures predating the final approved structure before June 2007*.

*Who Does Not Benefit*

Workers of state governments, local governments, and the private sector are not direct beneficiaries. The harmonisation applies only to DBS pensioners under PTAD’s mandate. 

Most state and LG workers are on the Contributory Pension Scheme (CPS) or the Contributory Defined Benefits Scheme (CDBS), and only 7 states plus the FCT are fully implementing CPS reforms. Private sector workers have been on CPS since 2004. 

*Facts and Figures*

- *N32,000 minimum increment* approved for DBS pensioners.

- *10.66% and 12.95% increases* for pensioners of defunct and privatised agencies.

- *N45 billion emergency funding* approved by the President, with N20.188 billion released in Sept 2025 for payment.

- *N5.12 billion arrears* paid to 90,689 DBS pensioners in Aug 2025.

- *N29.99 billion* paid to 168,511 DBS retirees in Q3 2025.

- *Enrolment into NHIS* approved for all DBS pensioners.

- *Settlement of unfunded liabilities* for NITEL/MTEL and other parastatal pensioners included in the 2026 budget.

PTAD says the recomputation will boost purchasing power eroded by inflation and reduce complaints that have persisted since PTAD was set up in 2013. 

No fresh application is required; eligible pensioners will be identified and processed automatically. 

*Recommendations*

1. *Extend the equity principle to states*: Federal and state governments should fast-track CPS implementation so state and LG pensioners also stop retiring into penury.

2. *Ensure transparency*: PTAD should publish the harmonisation review committee’s impact assessment and a timeline for payments to build trust.

3. *Strengthen funding*: The Federal Ministry of Finance should release the balance of the N45 billion approval promptly to avoid delays.

4. *Link to health*: Fast-track NHIS  so the pension increase isn’t wiped out by medical costs. 

*Conclusion*

DBS harmonisation is more than an administrative fix. PTAD calls it a “fairness mechanism and a demonstration of government’s commitment to social justice”. 

For thousands of federal retirees who have watched colleagues earn more for identical service, it restores dignity. 

The next step is ensuring the reform is funded, implemented without delay, and used as a model to push equity across all pension systems in Nigeria.