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The short answer
A Nigerian pension is paid by whoever holds it: your Pension Fund Administrator for a Retirement Savings Account, a life insurer if you bought an annuity, or PTAD for many older federal defined-benefit pensions. Payments normally go into a Nigerian bank account in your name, so a retiree in the US usually keeps that account, keeps their details current with the payer, and then decides when to spend or convert the money.
Who actually pays your pension
Nigeria has more than one pension system, and the payer decides how money reaches you abroad. Under the Contributory Pension Scheme, your savings sit in a Retirement Savings Account (RSA) with a Pension Fund Administrator (PFA). Our Nigeria library explains how the RSA system works; the short version for a retiree is below.
| Arrangement | Who pays | How it is paid |
|---|---|---|
| Programmed withdrawal | Your PFA | Lump sum plus monthly or quarterly payments from your RSA |
| Retiree life annuity | A life insurer licensed by NAICOM | Regular payments for life, guaranteed for 10 years |
| Federal defined-benefit pension (pre-CPS) | PTAD, for many Treasury-funded retirees | Monthly pension after verification |
| Foreign-currency RSA (Fund VII) | Your PFA | In US dollars, or naira on request |
TheCable’s explainer on PenCom and NAICOM rules (May 2022) sets out the two retirement options: under programmed withdrawal the balance stays in your RSA and passes to beneficiaries on death, and you can move to an annuity after a year; an annuity cannot be moved back to programmed withdrawal. TrustFund Pensions’ benefit page says benefits start on retirement under your terms of employment or at age 50, whichever is later.
Getting paid while you live in the US
Most retirees in the US are paid exactly as they would be at home: into a Nigerian bank account in their name. What changes is the paperwork and how you reach the payer.
- Keep a Nigerian account open and active. The pension needs somewhere to land. Banks run diaspora account processes for customers abroad; a dormant account can delay payments.
- Complete data recapture first. TrustFund’s page states that data recapture is required before a benefit request is processed. Many PFAs require biometrics, so plan this for a trip home if you have not done it.
- Update your contact details. Give the PFA your US address, phone and email so you receive statements and any verification requests.
- Defined-benefit pensioners: PTAD’s notice on verification says its diaspora verification continued even while walk-in verification at its offices was suspended. Watch PTAD’s own site for current exercises and do not pay anyone who offers to “verify” you for a fee.
Dollar pensions
PenCom’s Guidelines on Foreign Currency Pension Contributions (September 2025) created a voluntary US dollar route for Nigerians living abroad. Contributions go from a Non-Resident Nigerian Ordinary Account to the PFA’s foreign-currency collection account; benefits start at 50 or on health grounds and are paid in US dollars, or in naira on request. The same guidelines say an existing RSA holder who moves abroad keeps the RSA by updating their documentation, so you do not need to close a naira RSA when you emigrate.
Tax on the pension
On the Nigerian side, the Nigeria Tax Act 2025 continues the exemption for pension, gratuity and retirement benefits granted under the Pension Reform Act, as reported in the Premium Times summary of the Act. Check how your own payment is classified if it is paid outside the PRA framework.
On the US side, IRS Publication 54 (December 2025) says the worldwide income of US citizens and resident aliens is generally subject to US income tax. A Nigerian pension received while you are a US tax resident is therefore something to raise with your preparer, converted into dollars for the return. The US has no income tax treaty with Nigeria (Nigeria is absent from the IRS treaty list updated 3 January 2026), so there is no treaty article that exempts it. If your Nigerian pension and other balances push your foreign accounts above $10,000 at any point in the year, the IRS FBAR page says you file FinCEN Form 114. This is information, not tax advice.
Worked example (illustrative figures)
Suppose a programmed-withdrawal pension pays ₦450,000 a month. Over a year that is ₦5,400,000. At an example rate of ₦1,350 to $1 that is $4,000 for the US return, before any conversion costs. If it arrives in an account that already holds ₦9,000,000 (about $6,667 at the same example rate), the combined balance passes $10,000 and FBAR filing applies for that year.
If something goes wrong
Missed payments abroad usually trace back to one of three things: an account that went dormant, a phone number the PFA can no longer reach, or an incomplete verification. Write to the PFA from the email address on your file, quote your RSA PIN, and keep copies. If a PFA does not resolve a complaint, PenCom is the regulator. Be wary of anyone on social media promising to speed up a pension payment for a fee; legitimate PFAs and PTAD do not need middlemen.
What to check first
- Which body pays you: PFA, life insurer or PTAD.
- That your data recapture or verification is complete.
- That the receiving account is in your name, active, and linked to your current phone number.
- Whether you want to stay in naira or move into the dollar fund for new contributions.
- What your US preparer needs: annual statements from the payer, in naira, plus the rates you used.
Where Pryme fits
Your PFA or PTAD decides which accounts it pays into, so check with them first. Once the pension reaches you, a Pryme Personal Account opened from the US can hold naira and dollars side by side, and Swap converts only when you choose, showing the rate and the fee before you approve. Your Personal Assistant can prepare reminders for verification dates and bills at home; nothing moves without your approval. Read how Pryme works.
Questions people ask
Can my PFA pay my pension into a US bank account?
Check with your PFA. The standard route is a Nigerian bank account in your name. PenCom’s foreign-currency guidelines allow benefits from the dollar fund to be paid in US dollars.
Do I lose my RSA if I relocate to America?
No. PenCom’s September 2025 guidelines say an existing RSA holder moving abroad keeps the RSA by updating their documentation.
Is my Nigerian pension taxed in the US?
US citizens and residents are generally taxed on worldwide income, and there is no US Nigeria tax treaty. Ask a US preparer how your pension is treated.
How do PTAD pensioners abroad get verified?
PTAD has run diaspora verification separately from walk-in exercises. Follow notices on ptad.gov.ng and never pay a third party to verify you.
Sources
- PenCom: Guidelines on Foreign Currency Pension Contributions (September 2025) · accessed Oct 2026
- TrustFund Pensions: Benefit payment types · accessed Oct 2026
- TheCable: Programmed withdrawal vs retiree life annuity (26 May 2022) · accessed Oct 2026
- PTAD: notice on verification exercises · accessed Oct 2026
- AllAfrica (Premium Times): what changes under the Nigeria Tax Act 2025 · accessed Oct 2026
- IRS Publication 54 (12/2025): Tax Guide for U.S. Citizens and Resident Aliens Abroad · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.