FEC Approves Historic Gratuity for Retiring Civil Servants

ABUJA, March 5, 2026 – In a landmark move to reward public service dedication, the Federal Executive Council (FEC) has greenlit an Exit Benefit Scheme providing retiring Federal Civil Servants with gratuity equivalent to their full annual emolument. Effective January 1, 2026, this initiative targets officers with at least 10 years of service in Treasury-funded Ministries, Departments, and Agencies (MDAs), marking a significant upgrade to the Contributory Pension Scheme (CPS) after 22 years.​​

The approval caps months of groundwork by an Inter-Ministerial Technical Committee, involving the National Pension Commission (PenCom), Budget Office of the Federation, and Office of the Accountant-General. Head of the Civil Service, Mrs. Didi Esther Walson-Jack, hailed the decision as a “watershed” under President Bola Ahmed Tinubu’s administration, emphasizing its role in dignifying retirement and fostering a motivated workforce. This builds on earlier PenCom-OHCSF collaborations since mid-2025, where frameworks for gratuity—pegged at 100% of last gross annual pay—were first proposed to address long-standing retiree demands.

Background and Development

Discussions on restoring gratuity gained momentum in June 2025, when PenCom Director General Omolola Oloworaran met Walson-Jack to outline a sustainable model amid plans for pension arrears clearance via online enrolment starting August 2025. Initially eyeing an annual N30 billion allocation, the scheme evolved into a comprehensive safety net, insulating retirees from economic uncertainties through enhanced Retirement Savings Accounts (RSAs). Walson-Jack pledged circulars for MDA compliance, including a Standing Committee to refine modalities.

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This reform aligns with Tinubu’s people-centered Civil Service agenda, responding to calls for welfare improvements unmet since CPS replaced defined benefits in 2004. Unlike past proposals limited to life assurance or arrears bonds, the new scheme guarantees immediate financial security, potentially costing billions but framed as an investment in loyalty and productivity. Implementation guidelines are imminent, promising swift rollout.

Reactions and Implications

Walson-Jack described the approval as “profound acknowledgement” of civil servants’ sacrifices, boosting morale amid ongoing reforms for a performance-driven service. Observers see it as a Tinubu hallmark, echoing 2025/2026 Group Life Assurance nods and salary disbursements, while critics may scrutinize fiscal sustainability given Nigeria’s debt profile. For thousands approaching retirement, it spells relief and renewed faith in government promises.​