On March 5, the Federal Executive Council (FEC) approved a new Exit Benefit Scheme that introduces gratuity payments for retiring officers in treasury-funded ministries, departments and agencies (MDAs).
The approval, a 100 per cent gratuity payment for retiring federal civil servants, has sparked optimism among workers and retirees.
Under the scheme, eligible civil servants who have served for a minimum of 10 years will receive a lump-sum gratuity equivalent to 100 per cent of their total annual emoluments, essentially one full year of their salary package upon retirement.
The gratuity will complement the existing Contributory Pension Scheme (CPS), which was introduced about 22 years ago and had operated without a gratuity component for many federal civil servants.
The development has been widely welcomed by workers, many of whom say the lump-sum payment will provide immediate financial support and ease the transition from active service to retirement.
No doubt, the reintroduction of gratuity has rekindled hope among civil servants, many of whom had long worried about financial security after retirement.
Excited workers note with enthusiasm that the policy could significantly improve post-retirement financial security.
They believe the lump-sum payment will complement pension savings, enabling retirees to invest, support their families and manage life after decades of service.
Mr Segun Idowu, a federal civil servant in Abuja, described the decision as a “big win’’ for workers.
“This is a big win for federal workers; it is long overdue, but better late than never.
“It will help cushion the transition to retirement and give workers a sense of security after years of service,” he said.
Similarly, Hajia Safia Umaru said she was excited when she heard the news from a colleague, noting that the policy would reduce the financial anxiety associated with retirement.
“This is a very big relief from financial constraints after retiring from service.
“I used to be afraid whenever I hear what retirees go through after leaving the service without enough money at hand.
“If such money comes in lump sum, one can plan to build a house, establish a business and even continue sponsoring children’s education, because many of us retire while our children are still in school,” she said.
Mr Wale Ogunnaike, a Deputy Director who is expected to retire in July, also highlighted the importance of the reintroduced gratuity.
According to him, the benefit will complement pension savings under the CPS and provide retirees with a stronger financial base for investment.
“I am billed to retire in three months’ time and the total savings in my contributory pension scheme is about N20 million.
“With the provisions of the CPS Act, I am entitled to only 25 per cent of the contribution about N5 million as lump sum.
“The remaining 75 per cent, about N15 million, will be paid to me monthly over 10 years at approximately N125,000 per month,” he explained.
Ogunnaike said his concern had been how to start a viable business with only N5 million after spending about 35 years in service.
He said the gratuity would significantly improve his financial outlook.
“With my current monthly gross earnings of about N500,000, the anticipated gratuity payment will be about N6 million.
“With N5 million pension lump sum and N6 million gratuity, I can make reasonable investment decisions befitting a retired civil servant of my status.
“I want to commend and thank President Bola Tinubu and the Head of the Civil Service of the Federation, Mrs Didi Walson-Jack, for this new exit benefit which will greatly improve our retirement package,” he said.
Ogunnaike, however, appealed for prompt implementation of the policy to ensure that retirees benefit from it without delays.
On her part, Mrs Alice Ita also commended the Federal Government for the decision, noting that it had raised hope among civil servants still in active service.
According to her, the reintroduction of gratuity has brought renewed confidence to workers who previously worried about life after retirement.
“It will reduce the constant worry about what to do after retirement and the challenges of accessing pension. It is indeed a big relief,” she said.
Ita also urged the National Assembly to review the CPS Act to allow retirees access to at least 50 per cent of their total pension savings without restrictions.
Specifically, she called for the removal of the provision that allows lump-sum withdrawal only if the remaining balance can provide at least 50 per cent of the retiree’s final salary as monthly pension.
Another civil servant, Mr Obinna Ibe, described the return of gratuity as a welcome development, particularly in view of the prevailing economic challenges.
“When you look at what is happening in Nigeria, everybody goes to the same market whether you work in the Central Bank, NNPC, multinational companies or the core civil service.
“The gratuity will cushion the problems faced by many retirees in the core civil service,” he said.
Ibe also stressed the need for prompt payment of retirement benefits.
“If someone exits service this month, the system should be automated in such a way that the person receives the benefit immediately.
“There should not be bureaucratic bottlenecks or any gap between the period of retirement and the commencement of payment,” he said.
Mr Michael Samson also described gratuity as a “plan B’’ for civil servants after retirement.
According to him, the lump-sum payment will enable retirees to stabilise their lives and start small businesses.
“Gratuity is very essential for civil servants because it gives them hope of life after retirement.
“Many civil servants worry about how they will survive after leaving service.
“With gratuity, retirees can plan their lives better and have something to fall back on after years of service,” Samson said.
However, some workers expressed cautious optimism, noting that previous government policies had experienced delays in implementation.
Mr Paul Ifeanyichukwu urged the government to ensure that the scheme was backed by adequate funding and implemented without delay.
“I am not moved to rejoice yet because we have seen decisions by the government that have lingered.
“We pray that this one will not drag,” he said.
Others observers say the reintroduction of gratuity has rekindled hope among civil servants who have long worried about financial security after retirement.
They note that if effectively implemented, the policy could strengthen confidence in the civil service and enhance the welfare of workers who dedicate decades to public service.
All in all, stakeholders hold that prompt and transparent implementation will be critical to ensuring that the new policy delivers the relief and confidence it promises to Nigeria’s workforce.
