The National Pension Commission and the Office of the Head of the Civil Service of the Federation have agreed to collaborate on developing a gratuity framework for civil servants in treasury-funded ministries, departments, and agencies under the Contributory Pension Scheme.

PenCom disclosed this in a statement on Tuesday, following a courtesy visit by its Director-General, 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 the Office of the Head of the Civil Service of the Federation agreed to set up a standing committee to develop the proposed reforms and address future issues as they arise.

Oloworaran informed the Head of Service that PenCom is currently working on modalities for implementing a gratuity scheme in accordance with Section 4(4)(a) of the Pension Reform Act 2014, specifically for retiring employees of Federal Government treasury-funded MDAs.

She stated that implementing the gratuity scheme is estimated to cost the Federal Government around ₦30 billion annually. This figure was determined by PenCom and confirmed by the 2024 Stakeholders Committee on outstanding pension liabilities, based on the assumption that retiring federal employees receive 100 percent of their last gross annual remuneration.

She noted that while the amount is modest, it represents a significant and impactful step toward improving the welfare of those who have served the nation with dedication.

Furthermore, the PenCom Director-General highlighted the ongoing challenge of delayed pension payments caused by the late release of accrued rights. She acknowledged that previous collaboration between PenCom and the Office of the Head of the Civil Service had yielded notable progress, including securing Federal Executive Council approval for a ₦758 billion bond aimed at clearing outstanding pension liabilities under the Contributory Pension Scheme.

Ms. Omolola Oloworaran announced a one-time, comprehensive online enrolment exercise to determine the accrued pension rights liability of all serving federal employees in treasury-funded MDAs who were in service before June 2004. She explained that the verification and enrolment process, set to begin in August 2025, would allow PenCom to establish the total liability and present it to the Federal Government with a view to possibly issuing a bond to fully settle the amount.

She also requested the support of the Office of the Head of the Civil Service of the Federation in issuing a circular directing all MDAs to participate in the exercise and submit the required documentation.

Highlighting the benefits of the enrolment exercise, the PenCom DG stated that it would allow retirees to begin earning returns on their pension funds, while ensuring the system is protected from political transitions, as Pension Fund Administrators would assume full operational control.

She also pointed out that MDAs not enrolled in the Integrated Payroll and Personnel Information System continue to face issues with uncredited pension contributions, often due to remittances being made without the necessary supporting schedules.