THE NATIONAL Pension Commission (PenCom) has announced plans to partner with the Office of the Head of the Civil Service of the Federation (OHCSF) to introduce a gratuity scheme for civil servants under the Contributory Pension Scheme (CPS).
In a statement issued on Tuesday in Abuja, PenCom disclosed that the framework would apply to employees of treasury-funded Ministries, Departments, and Agencies (MDAs).

The Director-General of PenCom, Omolola Oloworaran, stated during a visit to the Head of the Civil Service of the Federation (HCSF) that the gratuity initiative aligns with Section 4(4)(a) of the Pension Reform Act (PRA 2014).
The scheme is estimated to cost the federal government approximately N30 billion annually, as determined by PenCom and confirmed by the 2024 stakeholders committee on outstanding pension liabilities.
Oloworaran described the scheme as a significant intervention to enhance the welfare of retiring civil servants who have dedicated their service to the nation. She attributed delays in pension payments to late remittances of accrued rights and highlighted previous successful collaborations between PenCom and OHCSF, including securing Federal Executive Council (FEC) approval for a N758 billion bond to settle outstanding CPS liabilities.
She said PenCom will conduct a comprehensive online verification and enrolment exercise in August to determine the accrued pension rights of federal employees who were in service before June 2004. This will enable the commission to present a consolidated liability figure to the government for possible bond issuance to settle the obligations.
Oloworaran explained that the accrued pension rights for eligible civil servants would be credited into their individual Retirement Savings Accounts (RSAs), allowing retirees to earn returns on these funds. She noted that the process would be managed by Pension Fund Administrators (PFAs), ensuring stability amid political transitions.
To streamline the process, PenCom is developing a digital application for the enrolment exercise, set to launch in August. The commission has requested OHCSF’s support in issuing a circular directing all MDAs to participate and submit required documentation.
Meanwhile, PenCom has introduced a new remittance system requiring employers to use selected Payment Solution Support Providers (PSSPs) for pension contributions, ensuring timely and accurate crediting to employees’ RSAs.
The Director-General also sought the HCSF’s intervention in directing the Integrated Payroll and Personnel Information System (IPPIS) office and non-IPPIS MDAs, such as tertiary institutions and self-funding agencies, to adopt the new remittance system effective June.
The Head of the Civil Service of the Federation, Mrs. Didi Walson-Jack, expressed support for the initiatives and commended PenCom’s efforts to enhance pension administration.
She pledged to issue necessary directives to MDAs and collaborate with PenCom to finalize the gratuity scheme’s modalities.
According to the statement, both parties agreed to establish a standing committee to oversee the reforms and address future challenges.