The National Pension Commission and the Office of the Head of the Civil Service of the Federation have agreed to partner to introduce a gratuity framework for civil servants in treasury-funded ministries, departments, and agencies under the Contributory Pension Scheme.
In a statement on Tuesday, PenCom indicated this was the outcome of a courtesy visit by the Director-General of PenCom, Ms Omolola Oloworaran, to the Head of the Civil Service of the Federation, Mrs Didi Esther Walson-Jack.
At the end of the meeting, PenCom and OHCSF agreed to establish a standing committee to work on the outlined reforms and address any emerging issues in the future.
Ms Oloworaran told the Head of Service that PenCom is working on modalities for the establishment of a gratuity scheme, in line with Section 4(4)(a) of the PRA 2014 for retiring employees of Federal Government treasury-funded MDAs.
PenCom DG said this has been estimated to cost the Federal Government about N30bn per annum, as determined by PenCom and confirmed by the 2024 Stakeholders Committee on outstanding pension liabilities if retiring federal employees are paid 100 per cent of their last gross annual remuneration.
She said the amount represented a modest but impactful intervention to improve the welfare of those who have served the nation with dedication.
Furthermore, the DG of PenCom highlighted the persistent issue of delayed pension payments due to the delay in payment of accrued rights. She noted that previous collaboration between PenCom and the Office of the Head of Service yielded significant progress, including securing a Federal Executive Council approval for a ₦758 bn bond to clear outstanding pension liabilities under the CPS.
Ms Oloworaran unveiled a one-time, comprehensive online enrolment exercise to establish the accrued pension rights liability of all serving federal employees of treasury-funded MDAs who were in service before June 2004. She said this online verification and enrolment exercise, which will commence in August 2025, will enable PenCom to present to the Federal Government the amount so determined with a view to possibly raising a bond to settle the entire liability once and for all. Ms Oloworaran sought OHCSF’s support to issue a circular directing all MDAs to participate in the enrolment and submit the necessary documentation.
On the benefits of the enrolment, the PenCom DG said retirees will start earning returns on these funds, and the system becomes shielded from political transitions, as Pension Fund Administrators will take full control.
MDAs not enrolled in the Integrated Payroll and Personnel Information System face the challenge of uncredited pension contributions. Ms 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 for the remittance of their employees’ contributions. This ensures accurate and prompt remittance of pension contributions into the respective RSAs of employees.
MDAs not enrolled in the Integrated Payroll and Personnel Information System face the challenge of uncredited pension contributions. 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.
