The Pension Transitional Arrangement Directorate (PTAD) has commenced the implementation of the Defined Benefit Scheme (DBS) Pension Harmonisation reform, a landmark initiative aimed at eliminating long-standing disparities in pension payments among Federal Government retirees.
The reform, approved under President Bola Tinubu’s Renewed Hope Agenda, represents one of the most significant changes to the legacy pension system since PTAD was established under the Pension Reform Act 2014 to administer pensions under the Defined Benefit Scheme.
Speaking on Wednesday, the Executive Secretary and Chief Executive Officer of PTAD, Tolulope Odunaiya, said the harmonisation exercise was designed to promote fairness, improve retirees’ welfare, and restore confidence in the administration of legacy pensions.
“This initiative is a landmark reform designed to restore fairness, improve retirees’ welfare, and strengthen confidence in the administration of the country’s legacy pension system.
“The objective is to ensure that retirees who held similar positions and rendered comparable years of service receive equitable pension benefits regardless of their retirement dates,” Odunaiya said.
Under the previous arrangement, pension benefits were calculated using the salary structure in force at the time an employee retired.
Consequently, public servants who retired earlier under lower salary scales often received significantly lower pensions than colleagues who retired later from the same grade level with comparable years of service.
PTAD explained that the harmonisation exercise differs from routine pension increases because it involves a comprehensive recalculation of pension benefits using the final approved salary structures applicable before the Defined Benefit Scheme was closed.
According to the directorate, the reform will establish a more equitable framework in which pension entitlements are determined by grade level and length of service, rather than by the date of retirement.
PTAD said the exercise covers pensioners under the Federal Government, the Parastatals Pension Department, the Defunct and Transferred Agencies Pension Department, and the Education and Health Pension Department.
The exercise also includes eligible retirees who began their public service under the Federal Government before their organisations were transferred to state governments.
The Defined Benefit Scheme was replaced by the Contributory Pension Scheme following the 2004 pension reforms. However, thousands of retirees who remained under the legacy scheme continue to receive pensions through PTAD.
The directorate said the harmonisation reform is expected to address decades of structural inequalities within the legacy pension system while establishing a more transparent, equitable, and sustainable framework for pension administration.
