The National Pension Commission (PenCom) and the Office of the Head of the Civil Service of the Federation (OHCSF) are working together to introduce a gratuity scheme for civil servants under the Contributory Pension Scheme (CPS), in a major step toward improving retirement benefits for federal government employees.
In a statement it released, PenCom said the new framework would apply to civil servants in treasury-funded ministries, departments, and agencies (MDAs) currently enrolled in the CPS.
The director-general of PenCom, Omolola Oloworaran, disclosed the plan during a courtesy visit to the Head of the Civil Service of the Federation, Dr. Didi Walson-Jack, on June 13. She said the commission is developing the gratuity scheme in line with Section 4(4)(a) of the Pension Reform Act 2014, which permits employers to establish gratuity schemes in addition to the CPS.
According to her, the scheme is projected to cost the federal government approximately N30 billion annually, based on estimates prepared by PenCom and validated by the 2024 Stakeholders Committee on Outstanding Pension Liabilities. While modest in scope, Oloworaran said the proposed scheme represents a meaningful step toward enhancing the welfare of public servants who have served the country with dedication.
She noted that persistent delays in pension payments are often caused by late disbursement of accrued rights, a challenge the proposed reforms aim to address. She highlighted that prior collaborations between PenCom and OHCSF had produced positive outcomes, including the Federal Executive Council’s approval of a N758 billion bond to settle outstanding pension liabilities under the CPS.
Oloworaran also announced that PenCom will commence a one-time, comprehensive online verification and enrolment exercise for federal government workers in treasury-funded MDAs who were employed before June 2004. Scheduled to begin in August 2025, the exercise is designed to determine the accrued pension rights of these employees.
She said the outcome of the exercise will help the commission present a verified liability figure to the federal government, with the aim of raising a bond to settle the accrued pension rights once and for all. Once determined, she added, the accrued rights will be credited into the Retirement Savings Accounts (RSAs) of eligible workers, enabling them to start earning returns on the funds through their Pension Fund Administrators (PFAs).
According to Oloworaran, the new system will enhance transparency and protect the pension process from political interference, as the PFAs will assume full responsibility for managing the funds. She also revealed that PenCom is developing a digital platform to simplify the enrolment process and has requested OHCSF to issue a circular directing all MDAs to participate and submit the required documentation.
Addressing the issue of uncredited contributions from MDAs not enrolled on the Integrated Payroll and Personnel Information System (IPPIS), Oloworaran noted that many payments were made without proper schedules, making reconciliation difficult. To tackle this, she said PenCom has launched a new pension remittance system requiring all employers to use approved Payment Solution Service Providers (PSSPs) to remit contributions, ensuring accuracy and timeliness in crediting RSAs.
She further called on the Head of Service to direct the IPPIS office within the Office of the Accountant-General of the Federation (OAGF), along with self-funded MDAs and tertiary institutions not on the IPPIS platform, to begin using the designated PSSPs from June.
In response, Dr. Walson-Jack welcomed the proposals and commended PenCom for its proactive efforts in reforming the pension system. She assured the commission of her full support and pledged to issue the necessary circulars to MDAs to ensure full compliance.
She noted that the demand for gratuity has been a longstanding one among civil servants and expressed optimism that the proposed scheme will address their concerns.
The statement concluded that both PenCom and OHCSF have agreed to establish a standing committee to guide implementation of the reforms and address future challenges as they arise.
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