From Adanna Nnamani, Abuja
The Federal Government is set to introduce a gratuity scheme for civil servants in treasury-funded Ministries, Departments, and Agencies (MDAs) under the Contributory Pension Scheme (CPS).
The initiative is being developed through a collaboration between the National Pension Commission (PenCom) and the Office of the Head of the Civil Service of the Federation (OHCSF), following a high-level meeting held on June 13, 2025, in Abuja.
According to a statement from PenCom on Tuesday, the Director General of PenCom, Omolola Oloworaran, paid a courtesy visit to the Head of the Civil Service, Mrs. Didi Esther Walson-Jack.
Oloworaran said the proposed scheme aligns with Section 4(4)(a) of the Pension Reform Act (PRA) 2014 and would ensure that retiring employees of treasury-funded MDAs receive a one-time gratuity in addition to their pension benefits.
According to her, PenCom and the 2024 Stakeholders Committee on outstanding pension liabilities estimated the cost of the scheme at about N30 billion annually, assuming retirees are paid 100 per cent of their last gross annual remuneration.
She described the plan as a modest but impactful intervention to improve the welfare of retiring civil servants.
The PenCom DG also highlighted the persistent challenge of delayed pension payments, largely due to the late release of accrued rights.
She noted that previous collaboration with the OHCSF had led to the Federal Executive Council (FEC) approving a N758 billion bond to offset outstanding pension liabilities under the CPS.
To determine the government’s total liability, the DG said PenCom will launch a one-time online enrolment exercise in August 2025 for all serving federal employees in treasury-funded MDAs who were in service before June 2004. The accrued pension rights calculated through the exercise would be credited directly into individual Retirement Savings Accounts (RSAs), allowing retirees to start earning returns immediately.
In addition, Oloworaran told the Head of Service that PenCom is developing a digital application to streamline the enrolment process. PenCom plans to deploy the online application by August 2025. She sought OHCSF’s support to issue a circular directing all MDAs to participate in the enrolment and submit the necessary documentation.
Speaking on the challenge of uncredited pension contributions among MDAs not enrolled in the Integrated Payroll and Personnel Information System (IPPIS). Oloworaran said that contributions are often made without accompanying schedules
To address this, the DG said PenCom has introduced a new Pension Contribution Remittance System that requires all employers to henceforth, utilise selected Payment Solution Support Providers (PSSPs) for the remittance of their employees’ contributions.
This ensures accurate and prompt remittance of pension contributions into respective RSAs of employees
The DG requested the Head of Service’s assistance in issuing directives to IPPIS Office in the Office of the Accountant General of the Federation (OAGF) and MDAs not on IPPIS, such as tertiary institutions, self-funding agencies, and others to henceforth, utilise selected PSSPs for remittance of monthly contributions, effective June 2025.
In response, the HCSF, Mrs. Walson-Jack, expressed her full support for all the initiatives and commended PenCom for its proactive approach to improving pension administration. She pledged to issue the necessary circulars to MDAs and to collaborate closely with PenCom in developing the modalities and securing the approvals for the Gratuity Scheme.
Mrs. Walson-Jack said civil servants have been calling for gratuity and expressed her full backing for the proposed Gratuity Scheme.
To cement the partnership, PenCom and OHCSF agreed to establish a Standing Committee to work on the outlined reforms and address any emerging issues in the future.
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