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Govt Set To Reintroduce Gratuities For Retiring Federal Workers

by Zaka Khaliq
12 hours ago
in News
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The federal government is set to clear all its outstanding pension liabilities and other arrears by December 15, 2025, as the process for the N758 billion pension bonds is being finalised.

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This is even as the federal government is about reintroducing gratuity payments for retiring civil servants nationwide.

Disclosing this at the workshop on ‘the workings of Contributory Pension Scheme (CPS) for employees/Pension Desk Officers (PDOs) across the Geo-political zones’ of the country, on Thursday in Yaba, Lagos, the director general, PenCom, Ms Omolola Oloworaran, said “the payments would have been done before now, but  for regulatory approvals that slowed down the process, which is presently almost concluded, all concerned retirees will be paid all their outstanding pension arrears on or before December 15.”

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She said, “Approval has been secured for issuing N758 billion bonds to clear long-standing pension obligations, including pension increases owed since 2007. This bold step by President Bola Ahmed Tinubu deserves commendation, as it will bring much-needed relief to vulnerable pensioners and restore confidence to our system.”

She added that PenCom does enrollment exercises for retiring workers every year and that all approved pension rights had been paid. “You get your benefits in the same months that you retire. The one for October will be paid in October; hence, all benefits for this year as well will be paid by December 15.”

Explaining the reasons for the huge accrued pensions for federal government employees prior to the emergence of President Bola Tinubu’s administration, she noted that previous administrations did not prioritise payments, and so budgetary provisions were low until the current administration came on board.

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“The key to the issue is that we were not funded. So, we must thank the president, even though it’s what he should do. But frankly, people before him didn’t do it. So, we want to thank President Bola Tinubu, who has made it possible for us to clear all our accrued rights and continue to pay benefits to all retirees of the public service and government, treasury-funded ministry, department and agencies (MDAs) as at when they retire,” she pointed out.

Saying the regulator wants to take a one- time enrollment of everyone (RSA holders), as this allows PenCom to calculate the approved entitlement that is due to every single federal worker, she added, “And once we can do that, we are then able to budget appropriately and then seek approvals to ensure that these funds are paid into the retirement savings account of the public service workers that are affected. Once that is done as well, it means that they can begin to earn returns on the accrued rights before their retirement. Right now, they are earning returns regardless, but they could be better.”

She also disclosed that her commission was working with the Office of the Head of the Civil Service to reintroduce gratuities for federal workers, adding that, ‘a framework has been developed to restore gratuity benefits for federal workers under CPS, in line with Section 4(4) of the PRA 2014.’

She said the gratuity, which would be equivalent to a worker’s one-year salary, would be paid to federal workers in the month of retirement. She noted that the payment would be activated from the day it is signed into law.

 

Meanwhile, Nigerian workers with side hustles can now make voluntary contributions without getting consent from their employers, contrary to what was obtained before.

 

Before now, workers who have alternative businesses have been itching to become voluntary contributors from their side hustles, but have encountered a stumbling block in regulation. The law stipulates that they have to go through their employers to contribute additionally to their pension accounts.

 

The idea of contributing through employers was to discourage money laundering in the pension industry. However, this system was challenged as most workers refused to push for additional contributions through their employers, especially when the one deducted from their salaries was not even remitted by the same employers, much less the additional 10 per cent an employer must contribute on behalf of an employee to the pools.

 

To open up the space and accrue more funds from voluntary contributions to the N25 trillion pension assets, it has been renamed Personal Contributions to accommodate workers in the formal and informal sectors as well.

 

Using the same Retirement Savings Account (RSAs) PIN, a worker can now make additional personal contributions to his or her savings. Oloworaran said this is one of the revolutions coming into the industry through the commission’s initiative, Revolution 2.0.

 

She added that the pension industry is introducing free health insurance for retirees. This initiative begins later this year, starting with pensioners in lower-income categories, ensuring dignity and security beyond financial pensions.

 

She noted that Pencom has organised this nationwide sensitisation workshop across all six geopolitical zones to deepen trust and ensure that every federal employee and pensioner fully understands the CPS and can access its benefits without delay.

 

In addition, “Today’s session is part of PenCom’s commitment to building the capacity of stakeholders, and will therefore provide practical solutions and clarity on the modalities for the upcoming 2026 retiree enrolment exercise and the planned one-off enrolment of all employees of treasury-funded MDAs entitled to accrued pension rights,” she explained.

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