.jpeg)
Federal Government, through the National Pension Commission (PenCom), has heralded a new era for retirees by announcing the near-complete eradication of historical pension arrears and the imminent re-introduction of a gratuity scheme for federal civil servants under the Contributory Pension Scheme (CPS).
This move represents a monumental effort to restore dignity to retirement and settle a decades-long financial burden.
PenCom has significantly reduced the backlog of accrued pension rights—the benefits earned under the old defined benefit scheme up to 2004—for retirees of treasury-funded Ministries, Departments, and Agencies (MDAs).
Supported by President Bola Ahmed Tinubu’s administration, accrued pension payments for retirees exiting service have been brought up to date, effectively clearing a backlog that once spanned almost two years.
This achievement, a product of rigorous financial commitment and a comprehensive strategy, marks a major step towards guaranteeing timely retirement benefits for all future retirees.
Crucially, the government is not just looking backward to clear debts; it is looking forward to enhancing retirement security.
PenCom and the Office of the Head of the Civil Service of the Federation (OHCSF) are actively collaborating to introduce a Gratuity Scheme for federal civil servants under the CPS.
This is a historic development, as gratuity, which was largely phased out with the introduction of the CPS, will now return as an additional retirement benefit. The proposed scheme is ambitious, reportedly offering civil servants a lump sum equivalent to 100% of their last gross annual pay upon retirement.
This is a deliberate policy aimed at adequately rewarding long-term service and providing a substantial financial cushion for retirees immediately after disengagement.
To solidify these reforms, PenCom is also implementing stricter compliance measures across the board and has announced a landmark increase in monthly pensions for existing CPS retirees.
Furthermore, a comprehensive online enrolment exercise is scheduled to verify all accrued pension rights and liabilities, ensuring that the system is fully transparent and future arrears are prevented.
These reforms collectively signal the government’s unwavering commitment to building a robust, transparent, and sustainable retirement system that honors the service of its citizens.