Twenty-eight state governments operating under the Contributory Pension Scheme (CPS) owe a combined N626.81 billion in unpaid pensions and gratuities, according to the 2025 State of States report released by the BudgIT Foundation.
The report also shows that 25 states, including the Federal Capital Territory (FCT), have remitted over N236.7 billion into the Retirement Savings Accounts (RSAs) of their workers over the last four years.
Rivers, Delta, and Akwa Ibom are identified as the leading debtors, collectively owing more than N330 billion. Rivers tops the list with an estimated N120 billion in outstanding liabilities, driven by recurrent expenditure pressures and wage obligations.
Delta follows with about N110 billion, despite being one of Nigeria’s major oil-producing states with substantial monthly allocations.
Akwa Ibom ranks third with approximately N100 billion in pension debt, which BudgIT attributes to poor management of long-term liabilities.
In the South-East, Anambra State, despite its strong internally generated revenue, still owes about N95 billion in pension arrears, a situation linked to weak fiscal planning and questionable spending choices.
Ogun State completes the top five with N90 billion owed to retirees, a puzzling contrast to its reputation as an industrial hub.
Under the Pension Reforms Act (PRA) 2014, employees are mandated to remit 8% of their salaries, while employers contribute 10%, for a total of 18% monthly into each worker’s RSA.
However, BudgIT’s findings indicate that many states continue to prioritise infrastructure projects and recurrent spending over obligations to retired workers.
The report notes that despite increased federal allocations and modest improvements in internally generated revenue, most states have failed to clear their pension backlogs, leaving thousands of retirees without access to their entitlements.
According to BudgIT, the N626.81 billion debt reflects deeper financial strain across states, worsened by declining federal transfers, inflation, and growing debt service costs.
“The accumulation of unpaid pensions and gratuities threatens fiscal sustainability and erodes public trust,” BudgIT warned.
It urged states to integrate pension repayments into their Medium-Term Expenditure Frameworks (MTEFs) and to publish detailed arrears data to improve transparency.
It also called on the federal government, development partners, and financial regulators to support states in developing sustainable solutions for managing pension liabilities, warning that failure to act could push more retirees into poverty and deepen Nigeria’s governance challenges.
