PenCom To Reintroduce Gratuity For Civil Servants Under Contributory Pension Scheme

The National Pension Commission (PenCom) has announced plans to reintroduce gratuity payments for federal civil servants under the Contributory Pension Scheme (CPS), as part of new measures aimed at improving the welfare of retirees and restoring confidence in Nigeria’s pension system.

The Director-General of PenCom, Ms. Omolola Oloworaran, disclosed this on Wednesday in Abuja during a sensitization workshop on the workings of the Contributory Pension Scheme for employees and Pension Desk Officers.

The event was jointly organized by PenCom and the National Salaries, Incomes and Wages Commission (NSIWC).

The DG was represented by Mr. Usman Musa, Director, Contribution and Bond Redemption Department, PenCom

Oloworaran said the proposal to reintroduce gratuity was being developed in collaboration with the Office of the Head of the Civil Service of the Federation in line with Section 4(4) of the Pension Reform Act 2014.

“Working with the Office of the Head of the Civil Service, a framework has been developed to restore gratuity benefits for federal workers under the CPS, in line with Section 4(4) of the PRA 2014,” she stated.

According to her, the initiative represents a major policy milestone that will ensure civil servants receive a lump sum gratuity in addition to their monthly pension payments upon retirement.

She noted that the move was consistent with the Commission’s broader reform agenda to enhance retiree welfare, strengthen transparency, and deepen trust in the Contributory Pension Scheme, which currently covers over 10 million Nigerians in both the public and private sectors.

The PenCom Boss revealed that pension assets had grown to ₦25tn, a feat that demonstrates the resilience of the CPS over the last two decades.

She explained that the assets were not only securing the future of workers and retirees but also contributing to national development through strategic investments.

“Over 844,000 retirees across both public and private sectors now enjoy steady, reliable, and transparent retirement benefits. Pension assets have grown to over ₦25 trillion, fueling national development while ensuring regular monthly payments for more than 552,000 retirees,” she said.

The PenCom boss also highlighted several ongoing reforms under the Pension Revolution 2.0 Initiative, including the introduction of Pension Boost 1.0, which increased monthly pensions for over 241,000 retirees; the Zero Waiting Time for Pension Payments policy, which ensures immediate access to benefits upon retirement; and the FGN Bond Issuance for Pension Liabilities, totaling ₦758bn to offset outstanding obligations and pension arrears since 2007.

“Since July 2025, no retiree waits to access their pensions. Payments are now immediate, aligned with monthly salary releases from the Federal Ministry of Finance,” she added.

Oloworaran further disclosed that PenCom would soon roll out free health insurance for retirees, starting with those in lower-income categories, to promote dignity and security beyond financial pensions.

She emphasized that while the CPS has recorded remarkable success, challenges remain, particularly with compliance among some states and employers.

To address this, the DG said PenCom is conducting a nationwide sensitization across all six geopolitical zones to educate workers and strengthen confidence in the scheme.

As part of ongoing digital reforms, she announced the development of a new Enrolment Application to simplify and fast-track the processing of retirement benefits.

“We have developed a new, more efficient Enrolment Application that will provide a user-friendly and seamless experience for all stakeholders in the chain of processing and payment of retirees’ benefits,” she stated.

In his remarks, the Chairman of the National Salaries, Incomes and Wages Commission (NSIWC), Mr. Ekpo Nta, commended PenCom for the reforms and described pension administration as central to organizational stability and national productivity.

He was represented by Mr. Akin Abe, Head of Compensation, NSIWC.

Nta traced the evolution of pension systems in Nigeria from the Defined Benefit Scheme (DBS), introduced in 1951, to the Contributory Pension Scheme (CPS), established by the Pension Reform Act of 2004 and amended in 2014.

Nta said the CPS was designed to ensure sustainability and transparency by being fully funded and privately managed, unlike the old scheme, which was characterized by massive arrears and poor recordkeeping.

He reaffirmed the NSIWC’s constitutional mandate to review pensions periodically, citing Section 173(3) of the 1999 Constitution, which requires pensions to be reviewed every five years or together with any civil service salary review.

“Pension is provided to offer financial security in old age, ensuring retirees can maintain their standard of living, reduce poverty, and prevent them from being a burden on their families or the government,” Nta stated.

He lauded the Tinubu administration for introducing far-reaching reforms in pension management, including the N758bn bond to clear pension liabilities, and urged participants to take advantage of the workshop to deepen their understanding of the CPS and its benefits.