The National Pension Commission (PenCom) is set to collaborate with the Office of the Head of the Civil Service of the Federation (OHCSF) to reintroduce a gratuity scheme for civil servants in treasury-funded Ministries, Departments, and Agencies (MDAs) under the Contributory Pension Scheme (CPS).
PenCom Director-General, Omolola Oloworaran, announced the initiative during a courtesy visit to the Head of Civil Service in Abuja. She explained that the proposed gratuity aligns with Section 4(4)(a) of the Pension Reform Act (PRA) 2014 and targets retiring employees of federal treasury-funded MDAs.
According to PenCom, the scheme is projected to cost the federal government ₦30 billion annually. Oloworaran described the initiative as a welfare intervention for workers who have served the country with dedication. She attributed delays in pension payments largely to outstanding accrued rights owed to retirees.
Oloworaran highlighted previous successes from PenCom’s collaboration with the OHCSF, including the Federal Executive Council’s approval of a ₦758 billion bond to clear backlogs of pension liabilities under the CPS.
To further address outstanding liabilities, PenCom announced plans to launch a one-time, comprehensive online enrolment exercise in August. This exercise will verify accrued pension rights for all federal employees who were in service before June 2004, enabling the commission to determine total liabilities and potentially raise a bond to fully settle them.
The accrued benefits will be credited directly into the Retirement Savings Accounts (RSAs) of eligible employees, allowing them to earn returns while reducing the risk of political interference. Pension Fund Administrators (PFAs) will assume full management of these accounts.
As part of efforts to streamline the process, PenCom is developing a digital application to automate the enrolment exercise and is seeking OHCSF’s support to issue a circular mandating full participation by MDAs.
Addressing the issue of uncredited pension contributions, particularly from MDAs not enrolled on the Integrated Payroll and Personnel Information System (IPPIS), Oloworaran revealed that PenCom had introduced a new remittance system. Under this system, employers are now required to use designated Payment Solution Support Providers (PSSPs) for timely and accurate remittances into employees’ RSAs.
She urged the Head of Civil Service to issue directives to the IPPIS office at the Office of the Accountant-General of the Federation (OAGF) and to MDAs, including tertiary institutions and self-funding agencies, to adopt the PSSP system from June.
