PenCom in partnership agreement with OHCSF to kick-start payment of gratuity to civil servants under CPS

By allcitynews.ng

Amidst biting economic hardship, inflation that is reducing the purchasing power of everyone, the leadership of the Apex Pension Regulatory Body, National Pension Commission (PENCOM) has entered into partnership agreement with
the Office of the Head of the Civil Service of the Federation (OHCSF) to start payment of gratuity under Contributory Pension Commission (CPS).

The move, if fully implemented, would increase the benefits for federal civil servants that are under the Contributory Pension Scheme (CPS).

This was disclosed during a high-level meeting held on June 13, 2025, in Abuja, where the Director General of PenCom, Ms. Omolola Oloworaran, paid a courtesy visit to the Head of the Civil Service of the Federation (HCSF), Mrs. Didi Esther Walson-Jack.

Ms. Oloworaran revealed that the gratuity proposal aligns with Section 4(4)(a) of the Pension Reform Act 2014, and is aimed at civil servants in Federal Government treasury-funded Ministries, Departments and Agencies (MDAs). She stated that the projected cost of implementing the scheme is about N30 billion annually — a modest but impactful investment in the welfare of retirees.

“We believe this is a fair and feasible intervention to improve the retirement experience for those who have served this country diligently,” she said.

The PenCom DG further addressed the long-standing challenge of delayed pension payments due to the government’s failure to timely release Accrued Rights. She recalled that previous collaborations with the OHCSF led to the Federal Executive Council (FEC) approving a N758 billion bond to offset some of the outstanding pension liabilities.

To permanently resolve pension delays, Oloworaran announced that PenCom would commence a one-time, comprehensive online verification and enrolment exercise from August 2025. This process aims to establish the total pension liability of federal employees who were in service before June 2004, with a view to presenting the total figure to the federal government for a possible bond issuance.

“The determined accrued rights will be credited directly into each retiree’s Retirement Savings Account (RSA), allowing them to earn returns immediately and insulating their benefits from political transitions,” she explained.

She also revealed that PenCom is developing a digital enrolment application, set for deployment in August 2025, and appealed to the OHCSF to issue a circular directing all MDAs to participate and submit necessary documentation.

Another critical challenge discussed was the persistent issue of uncredited pension contributions among MDAs not enrolled on the Integrated Payroll and Personnel Information System (IPPIS). Oloworaran noted that while payments are made, the required contribution schedules are often missing.

To address this, PenCom has introduced a new Pension Contribution Remittance System that mandates all employers to use designated Payment Solution Service Providers (PSSPs). This, she said, will ensure timely and accurate remittances into employees’ RSAs. She sought support from the OHCSF to direct the IPPIS office and non-IPPIS MDAs — including tertiary institutions and self-funded agencies — to implement this new system from June 2025.

In her response, HCSF Mrs. Walson-Jack expressed strong support for all of PenCom’s initiatives and commended the agency for its proactive reforms.

“Civil servants have long advocated for the restoration of gratuity. I fully support this initiative and will collaborate with PenCom to ensure the necessary modalities and approvals are secured,” she said.

The two institutions also agreed to set up a Standing Committee to drive the proposed reforms, oversee implementation, and resolve emerging issues.

If successfully implemented, the gratuity scheme and accompanying reforms could significantly transform Nigeria’s pension landscape, offering federal civil servants greater security and dignity in retirement.

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