The National Pension Commission (PenCom) and the Office of the Head of the Civil Service of the Federation (OHCSF) has announced a partnership to introduce a Gratuity Framework for civil servants in treasury-funded Ministries, Departments, and Agencies (MDAs) under the Contributory Pension Scheme (CPS).
The announcement was made at the end of a high-level meeting held in Abuja, following a courtesy visit by the Director-General of PenCom, Ms. Omolola Oloworaran, to the Head of the Civil Service of the Federation (HCSF), Mrs. Didi Esther Walson-Jack.
Gratuity is a payment made to an employee by an employer, often upon retirement or resignation, as a reward for their service and dedication.
It’s a lump sum, typically calculated based on the employee’s salary and length of service. It can also refer to a tip given to service workers.
Speaking about retirement benefits, 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.
“This has been estimated to cost the federal government only 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 noted.
The PenCom DG also stated that plans are underway for a comprehensive online enrolment exercise to establish the accrued pension rights liability of all serving federal employees of treasury-funded MDAs who were in service prior to June 2004.
She said this online verification and enrolment exercise, which will commence from August 2025, will enable PenCom to present to the Federal Government the amount so determined, with a view to possibly raise a Bond to settle the entire liability once and for all.
She added that the determined accrued pension rights for every eligible civil servant will be credited into their individual Retirement Savings Accounts (RSAs).
In response, Walson-Jack, expressed her full support for all the initiatives and commended PenCom for its proactive approach to improving pension administration.
She added that she will issue the necessary circulars to MDAs and to collaborate closely with PenCom in developing the modalities and securing the approvals for the Gratuity Scheme.
