The National Pension Commission and the Office of the Head of the Civil Service of the Federation are working together to introduce a Gratuity Framework for civil servants in treasury-funded Ministries, Departments, and Agencies under the Contributory Pension Scheme.
This was disclosed following a high-level meeting in Abuja on June 13, 2025, where the Director General of PenCom, Ms. Omolola Oloworaran, paid a courtesy visit to the Head of the Civil Service of the Federation, Mrs. Didi Esther Walson-Jack.
Addressing the HCSF, Ms. Oloworaran said PenCom is finalising modalities for the establishment of a Gratuity Scheme for retiring civil servants, in accordance with Section 4(4)(a) of the Pension Reform Act (PRA) 2014.
She noted that the scheme is estimated to cost the Federal Government only about ₦30 billion annually, based on calculations by PenCom and the 2024 Stakeholders Committee on outstanding pension liabilities, assuming retirees receive 100% of their last gross annual pay.
“This amount represents a modest but impactful intervention to improve the welfare of those who have served the nation with dedication,” Ms. Oloworaran said.
She also addressed the long-standing challenge of delayed pension payments caused by the late release of accrued rights.
According to her, prior collaboration with the OHCSF had already led to significant progress, including the Federal Executive Council’s approval of a ₦758 billion bond to clear outstanding pension liabilities under the CPS.
To further tackle this issue, the DG announced that PenCom will carry out a one-time comprehensive online enrolment exercise to determine the accrued pension rights liabilities of all federal employees who were in service before June 2004. The verification exercise is scheduled to begin in August 2025.
“This will enable PenCom to present the actual liability to the Federal Government with a view to possibly raise a bond to settle the entire amount once and for all,” she explained.
She added that each civil servant’s accrued pension rights will be credited to their individual Retirement Savings Accounts (RSAs), allowing them to begin earning returns while insulating the system from political transitions. Pension Fund Administrators (PFAs), she said, would take full control once the funds are credited.
Ms. Oloworaran further revealed that PenCom is developing a digital application to streamline the enrolment process and intends to launch it by August 2025. She appealed to the OHCSF to issue a circular directing all MDAs to participate in the enrolment and submit the necessary documentation.
On the issue of uncredited contributions among MDAs not enrolled in the Integrated Payroll and Personnel Information System (IPPIS), the PenCom DG said many contributions are made without corresponding schedules.
To correct this, she announced that PenCom has introduced a new Pension Contribution Remittance System requiring employers to use selected Payment Solution Support Providers (PSSPs) going forward.
She urged the HCSF to help direct the IPPIS Office in the Office of the Accountant-General of the Federation (OAGF), as well as MDAs not on IPPIS including tertiary institutions and self-funding agencies to begin using the selected PSSPs for monthly contributions, effective June 2025.
In her response, the Head of the Civil Service of the Federation, Mrs. Walson-Jack, expressed full support for all PenCom’s initiatives and praised the Commission for its proactive approach to pension administration.
“I fully back the proposed Gratuity Scheme. Civil servants have been calling for gratuity, and we are committed to making it a reality,” she said.
She pledged to issue the necessary circulars to MDAs and to work closely with PenCom in developing the scheme and securing needed approvals.
To formalize the partnership and ensure sustained progress, both institutions agreed to establish a Standing Committee to develop the proposed reforms and address any issues that may arise in the future.