Abuja: The National Pension Commission (PenCom) is set to collaborate with the Office of the Head of the Civil Service of the Federation (OHCSF) to introduce gratuity for civil servants in treasury-funded Ministries, Departments, and Agencies (MDAs) under the Contributory Pension Scheme (CPS). The announcement was made in a statement issued by PenCom, detailing the framework aimed at improving the welfare of federal employees.
According to News Agency of Nigeria, PenCom's Director-General, Omolola Oloworaran, revealed during a visit to the Head of the Civil Service of the Federation (HCSF) that the gratuity scheme will be established in line with Section 4(4)(a) of the Pension Reform Act (PRA 2014) for retiring employees of Federal Government treasury-funded MDAs. The initiative is estimated to cost the government approximately N30 billion per annum, as determined by PenCom and confirmed by the 2024 stakeholders committee on outstanding pension liabilities.
Oloworaran emphasized that the scheme represents a modest but impactful intervention to improve the welfare of those who have served the nation with dedication. One of the persistent issues addressed by the initiative is the delay in payment of accrued rights, which has been a challenge for retirees.
The Director-General highlighted previous successful collaborations between PenCom and the OHCSF, including securing a Federal Executive Council (FEC) approval for a N758 billion bond to clear outstanding pension liabilities under the CPS. Oloworaran also announced a comprehensive online enrolment exercise set to begin in August, aimed at establishing the accrued pension rights liability of all serving federal employees of treasury-funded MDAs who were in service prior to June 2004.
This online verification and enrolment exercise will enable PenCom to present a determined amount to the government, potentially leading to the issuance of a bond to settle the entire liability. The accrued pension rights for eligible civil servants will be credited into their individual Retirement Savings Accounts (RSAs), allowing retirees to earn returns on these funds and securing the system against political transitions.
PenCom is also developing a digital application to streamline the enrolment process, which they plan to deploy by August. Oloworaran sought the support of OHCSF to issue a circular directing all MDAs to participate in the enrolment and submit necessary documentation.
Addressing the challenge of uncredited pension contributions among MDAs not enrolled in the Integrated Payroll and Personnel Information System (IPPIS), Oloworaran noted that some contributions were often made without accompanying schedules. To combat this, PenCom introduced a new pension contribution remittance system, requiring all employers to utilise selected Payment Solution Support Providers (PSSPs) for the remittance of their employees' contributions, ensuring accurate and prompt remittance into respective RSAs.
The Director-General requested assistance from the head of service in issuing directives to the IPPIS office in the Office of the Accountant-General of the Federation (OAGF) and MDAs not on IPPIS, such as tertiary institutions and self-funding agencies, to utilise selected PSSPs for remittance of monthly contributions effective June.
Mrs. Didi Walson-Jack, the Head of the Civil Service of the Federation, expressed her support for the initiatives and commended PenCom for its proactive approach to improving pension administration. She pledged to issue the necessary circulars to MDAs and collaborate closely with PenCom in developing the modalities and securing approvals for the gratuity scheme. Walson-Jack acknowledged the longstanding demand for gratuity by civil servants and expressed her full backing for the proposed scheme.
The statement concluded with an agreement between PenCom and OHCSF to establish a standing committee to work on the outlined reforms and address any emerging issues in the future.