The Federal Government has initiated moves 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 collaborative effort 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.
The PenCom, in a statement issued on Tuesday by its Director General, Omolola Oloworaran, when she led a team of the commission on a courtesy visit to the Head of the Civil Service of the Federation, Mrs. Didi Esther Walson-Jack, said the proposed scheme aligned 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, the commission and the 2024 Stakeholders Committee on outstanding pension liabilities estimated the cost of the scheme at about N30 billion yearly on the assumption that retirees are fully paid their last gross annual remunerations.
While describing the plan as a modest but impactful intervention to improve the welfare of retiring civil servants, Oloworaran lamented the persistent challenge of delayed pension payments, largely due to the late release of accrued rights.
She recalled that past collaboration between the commission and the OHCSF resulted in the Federal Executive Council’s (FEC’s) approval of a N758 billion bond to offset outstanding pension liabilities under the CPS.
According to her, to determine the government’s total liability, the PenCom will launch a one-time online enrolment exercise in August this year for all serving federal employees in treasury-funded MDAs who were in service before June 2004.
The Director-General said that the exercise would facilitate the direct payment of the accrued pension rights into individual Retirement Savings Accounts (RSAs), allowing retirees to start earning returns immediately.
Similarly, the pension expert hinted the HCSF that the commission was developing a digital application to streamline the enrolment process and that the deployment of the online application platform would commence by August 2025.
She, therefore, solicited the OHCSF’s support for the exercise by issuing a circular directing all MDAs to participate in the enrolment and submit the necessary documentation.
On the challenge of un-credited pension contributions among MDAs not enrolled in the Integrated Payroll and Personnel Information System (IPPIS), Oloworaran said that contributions were often made without accompanying schedules
To find a lasting solution to the problem, she disclosed the commission had introduced a new Pension Contribution Remittance System that required all employers to henceforth utilise selected Payment Solution Support Providers (PSSPs) for the remittance of their employees’ contributions in order to ensure accurate and prompt remittance of pension contributions into respective RSAs of employees
Similarly, the PenCom boss 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 her response, the HCSF promised her Office’s full support for all the initiatives and commended the PenCom’s management for its proactive approach to improving pension administration.
To strengthen the partnership, the PenCom and OHCSF agreed to inaugurate a Standing Committee to work on the outlined reforms and address any emerging issues on the initiatives.
Photo Caption
The Head of the Civil Service of the Federation (HCSF), Mrs. Didi Esther Walson-Jack (left) and Director-General PenCom, Ms. Omolola Oloworaran; during her courtesy visit to the HCSF) on Tuesday in Abuja
