Nigeria’s pensioners, particularly those under the Defined Benefits (DB) scheme, are facing severe hardship as years of economic volatility, high inflation, and currency devaluation have aggressively eroded the real value of their fixed incomes. The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has raised the alarm, stating that many retirees have been plunged into “hardship and penury” due to their stagnant monthly payments.
The association’s president, Festus Osifo, speaking at a summit on the future of pensions in the Nigerian oil and gas industry, highlighted the core economic challenge: the defined benefits structure, which predates the current Contributory Pension Scheme (CPS), has a significant “lacuna” that caps the retirement benefits of those who retired several years ago.
“We understand what inflation has done in Nigeria. We understand what devaluation has done to our remuneration,” Osifo stated.
This has created a two-tiered system where the income of these older pensioners remains largely frozen, leaving them unable to cope with a cost of living that has dramatically increased. While some company managements have shown discretion in adding “little things” to pensioners’ earnings, this is not a mandatory or systematic fix. This fixed-income problem is particularly acute in Nigeria, where headline inflation hit 28.9 percent in August 2025, according to the National Bureau of Statistics (NBS), meaning money loses its purchasing power very quickly.
Osifo called on the National Pension Commission (PENCOM) to urgently focus on closing the systemic gaps to ensure that pension funds are truly sufficient to take care of current and future retirees. The association is working to articulate measures and strategies to bring succour to these troubled pensioners.
The summit is expected to yield a communiqué outlining concrete solutions. Osifo confirmed, “We will come up with a communiqué that we are going to use in engaging management of the respective organisations, and in engaging the operators of the PFAs across the oil and gas industry.”
This crisis underscores a broader national economic issue: the failure to institutionalise a mechanism for regular pension adjustments tied to inflation. Analysts have long argued that without a statutory framework to index pensions to the Consumer Price Index (CPI), or a composite index reflecting key costs like food and healthcare, the financial security of retirees—who spent decades building the nation’s economy will continue to diminish, creating a looming social crisis.
