Under the leadership of President Bola Ahmed Tinubu, the Federal Government is set to introduce a landmark ₦30 billion annual gratuity scheme for federal civil servants retiring under the Contributory Pension Scheme. The initiative, proposed by the National Pension Commission (PenCom) in collaboration with the Office of the Head of the Civil Service of the Federation, is designed to offer a one-time lump sum equivalent to 100 percent of a retiree’s final gross annual salary.
PenCom Director-General Omolola Oloworaran stated that the scheme is structured under Section 4(4)(a) of the Pension Reform Act 2014. Based on data from the 2024 Stakeholders Committee on Outstanding Pension Liabilities, it is estimated to cost around ₦30 billion annually. Oloworaran described the scheme as a modest but meaningful intervention aimed at improving post-service welfare for civil servants.
The development follows a strategic meeting between PenCom and the Head of Civil Service, Didi Esther Walson Jack, where both parties agreed to establish a joint standing committee to finalise the scheme’s design and address implementation challenges. The committee will develop the framework necessary for effective rollout.
A key component of the plan includes a comprehensive online enrolment exercise scheduled to begin in August 2025. This process will cover all federal workers who entered service before June 2004, helping to accurately determine their accrued pension rights. The enrolment is expected to support the potential issuance of a government bond to settle outstanding pension liabilities in one payment. These funds will then be credited into retirees’ Retirement Savings Accounts, allowing them to begin earning investment returns immediately and shielding them from delays or political uncertainty.
To further improve efficiency and transparency, PenCom is set to deploy a new remittance system that requires Ministries, Departments, and Agencies to make pension contributions through approved Payment Solution Support Providers. This is expected to enhance the traceability and timeliness of contributions.
Head of Civil Service Didi Walson Jack expressed strong support for the initiative and pledged to issue the necessary circulars to MDAs, help develop operational guidelines, and work closely with PenCom to ensure successful implementation. The scheme is seen as part of President Tinubu’s broader commitment to civil service reform and social security under the Renewed Hope Agenda.
