The National Pension Commission (PenCom) and the Office of the Head of the Civil Service of the Federation (OHCSF) have agreed to jointly develop a gratuity framework for civil servants in treasury-funded ministries, departments, and agencies (MDAs) under the Contributory Pension Scheme (CPS).
The move was announced following a courtesy visit by the Director-General of PenCom, Ms Omolola Oloworaran, to the Head of the Civil Service, Mrs Didi Esther Walson-Jack.
According to PenCom, the proposed scheme is estimated to cost the Federal Government about ₦30 billion annually, based on a model that pays retirees 100% of their last gross annual remuneration. Oloworaran described it as a modest but impactful step toward improving the welfare of dedicated public servants.
She also addressed ongoing concerns over delayed pension payments due to the backlog of accrued rights. PenCom’s previous collaboration with the OHCSF had secured a Federal Executive Council (FEC) approval for a ₦758 billion bond to clear outstanding liabilities under the CPS.
To further streamline pension administration, PenCom will, from August 2025, launch a comprehensive online enrolment and verification exercise for all serving federal workers in treasury-funded MDAs who joined service before June 2004. The results will help determine the total accrued pension rights liability, with the goal of presenting the data to the government to raise a bond for complete settlement.
Ms Oloworaran requested support from the OHCSF to direct MDAs to participate fully and submit necessary documentation. She explained that the move would protect pension funds from political transitions and allow retirees to start earning returns on their pension assets promptly.
She also highlighted challenges faced by MDAs not enrolled in the Integrated Payroll and Personnel Information System (IPPIS), such as uncredited pension contributions due to missing schedules. To solve this, PenCom has introduced a new Pension Contribution Remittance System, requiring all employers to use certified Payment Solution Support Providers for accurate and timely remittances into Retirement Savings Accounts (RSAs).
Responding, Mrs Walson-Jack pledged her full support, acknowledging that civil servants have long demanded a return of gratuity payments. She promised to issue the necessary circulars and collaborate closely with PenCom on the scheme’s rollout.
Both institutions agreed to form a standing committee to develop the modalities of the proposed gratuity scheme and address future implementation challenges.
Oloworaran concluded by noting that the framework is in line with Section 4(4)(a) of the Pension Reform Act (PRA) 2014, which allows for the establishment of gratuity for retiring employees in treasury-funded federal MDAs.
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