The National Pension Commission (PenCom) and the Office of the Head of the Civil Service of the Federation (OHCSF) have forged a significant partnership to introduce a Gratuity Framework for civil servants within treasury-funded Ministries, Departments, and Agencies (MDAs) operating under the Contributory Pension Scheme (CPS). This pivotal announcement followed a high-level meeting held in Abuja on June 13, 2025, which included a courtesy visit by PenCom's Director-General, Ms. Omolola Oloworaran, to the Head of the Civil Service of the Federation (HCSF), Mrs. Didi Esther Walson-Jack.

A gratuity is defined as a lump sum payment made by an employer to an employee, typically upon retirement or resignation, as recognition for their dedicated service. This amount is usually calculated based on the employee's salary and tenure. Ms. Oloworaran confirmed that PenCom is actively developing the modalities for this Gratuity Scheme, which aligns with Section 4(4)(a) of the Pension Reform Act (PRA) 2014. It is estimated that this scheme will cost the federal government approximately N30 billion per annum, as determined by PenCom and corroborated by the 2024 Stakeholders Committee on outstanding pension liabilities, assuming retiring federal employees receive 100 percent of their last gross annual remuneration. This initiative is viewed as a modest yet impactful intervention designed to significantly improve the welfare of those who have faithfully served the nation.

Beyond the Gratuity Scheme, PenCom is also addressing the persistent challenge of delayed pension payments, particularly those linked to the late release of accrued rights. Ms. Oloworaran highlighted previous successful collaborations with the OHCSF, which led to the Federal Executive Council (FEC) approving a N758 billion bond aimed at clearing outstanding pension liabilities under the CPS. To further tackle this, PenCom plans a comprehensive, one-time online enrolment exercise, set to commence in August 2025. This exercise will establish the accrued pension rights liability for all serving federal employees of treasury-funded MDAs who were in service prior to June 2004. The objective is to determine the exact amount owed, potentially leading to the issuance of a bond to settle the entire liability conclusively. Once determined, these accrued pension rights will be credited directly into individual Retirement Savings Accounts (RSAs), allowing retirees to begin earning returns on these funds immediately and ensuring the system is shielded from political transitions, with Pension Fund Administrators (PFAs) taking full control. PenCom is developing a dedicated digital application to streamline this enrolment process, with deployment anticipated by August 2025, and has requested the OHCSF's support in issuing circulars directing all MDAs to participate and submit necessary documentation.

Addressing the issue of uncredited pension contributions, particularly among MDAs not enrolled in the Integrated Payroll and Personnel Information System (IPPIS) where contributions are often made without accompanying schedules, PenCom has introduced a new Pension Contribution Remittance System. This system mandates all employers to utilize selected Payment Solution Support Providers (PSSPs) for the remittance of their employees’ contributions, effective June 2025. This measure aims to ensure accurate and prompt remittance of pension contributions into the respective RSAs of employees. The PenCom DG also sought the HCSF’s assistance in issuing directives to the IPPIS Office in the Office of the Accountant General of the Federation (OAGF) and other non-IPPIS MDAs, such as tertiary institutions and self-funding agencies, to adopt the PSSPs for monthly contributions.

In response to these initiatives, Mrs. Didi Esther Walson-Jack expressed her full support and commended PenCom for its proactive approach to enhancing pension administration. She pledged to issue the requisite circulars to MDAs and committed to close collaboration with PenCom in developing the modalities and securing the necessary approvals for the Gratuity Scheme, acknowledging the long-standing calls from civil servants for gratuity. To solidify this crucial partnership and ensure ongoing progress, PenCom and OHCSF have agreed to establish a Standing Committee tasked with overseeing the outlined reforms and addressing any future emerging issues.