The Federal Government has taken a major step towards strengthening retirement welfare for civil servants by establishing a dedicated account at the Central Bank of Nigeria (CBN) to manage and disburse funds under the newly approved Exit Benefit Scheme.
The move is designed to ensure transparency, accountability, and timely payment of benefits to eligible retiring workers across federal government institutions.
Details of the arrangement were contained in an implementation guideline signed by the Head of the Civil Service of the Federation, Didi Walson-Jack, which outlines the operational framework for the scheme approved by the Federal Executive Council.
PenCom to Manage Dedicated Retirement Fund
According to the guideline, the account will be domiciled with the Central Bank of Nigeria and managed by the National Pension Commission (PenCom), which will serve as the sole custodian of all funds allocated to the programme.
The document stated:
“To facilitate efficient management and accountability, a dedicated Exit Benefit Scheme Account shall be maintained with the Central Bank of Nigeria under the management of PenCom.”
It further explained that the account would exist exclusively for financing the scheme and ensuring proper monitoring of all transactions.
“This account shall be operated solely for the purpose of financing the Exit Benefit Scheme. It shall enable transparent tracking of inflows and outflows, ensuring that all disbursements are properly accounted for and that records are maintained by all relevant agencies.”
The establishment of the ring-fenced account is expected to reduce concerns over delayed payments and funding challenges that have historically affected retirement benefits within the public service.
What Retiring Civil Servants Will Receive
Under the new scheme, employees of treasury-funded Ministries, Departments and Agencies (MDAs) who have completed a minimum of 10 years in service will be entitled to a one-time payment equivalent to 100 per cent of their total annual emoluments at the point of retirement or disengagement.
The guideline noted:
“The Exit Benefit Scheme is designed to enhance the welfare of eligible Federal Government employees upon their exit from Service.”
It added:
“Under the Scheme, eligible beneficiaries shall receive an amount equivalent to one hundred per cent (100%) of their total annual emoluments at the time of exit from the Service.”
The policy officially took effect from January 1, 2026.
Scheme Will Not Replace Existing Pension System
Government officials clarified that the Exit Benefit Scheme is not intended to replace the existing Contributory Pension Scheme but rather to serve as an additional layer of financial support for retirees.
The circular stated:
“For the avoidance of doubt, the introduction of the Exit Benefit Scheme is complementary to the ongoing Contributory Pension Scheme. The existing Pension Scheme continues in operation.”
This means eligible workers will continue to receive their pension benefits while also qualifying for the new exit package, provided they meet the stipulated conditions.
Government to Fully Fund the Programme
Unlike the Contributory Pension Scheme, the Exit Benefit Scheme will be fully financed by the Federal Government and will not require contributions from employees.
According to the guideline:
“The Exit Benefit Scheme shall be fully funded by the government as a non-contributory, post-exit entitlement for eligible employees of Treasury-funded Ministries, Departments and Agencies.”
The government described the initiative as a statutory welfare programme aimed at rewarding long-serving public servants and easing their transition into retirement.
“This funding responsibility underscores the scheme’s status as a statutory welfare initiative, and reinforces the government’s commitment to supporting employees with additional benefits upon exiting from the service after a minimum of 10 years.”
How the Funding and Payment Process Will Work
The implementation framework outlines a multi-agency process designed to ensure accurate computation and timely payment of benefits.
Under the arrangement:
- PenCom will obtain retirement and payroll records from the Integrated Payroll and Personnel Information System (IPPIS) and the Government Integrated Financial Management Information System (GIFMIS).
- The commission will compile and verify a database of prospective retirees.
- It will then calculate the financial obligations due to eligible beneficiaries.
- The Budget Office of the Federation will provide annual appropriations based on PenCom's projections.
- The Federal Ministry of Finance will prepare quarterly cash release plans.
- The Office of the Accountant-General of the Federation will transfer approved funds into the dedicated Exit Benefit Scheme Account at the CBN.
Once funds are received, PenCom will remit them to beneficiaries through their Pension Fund Administrators (PFAs).
The guideline also directs PFAs to complete payments promptly.
Beneficiaries are expected to receive their funds within 10 working days after PFAs receive remittances from PenCom.
Transitional Arrangements for Recent Retirees
The Federal Government has also approved transitional provisions to ensure that workers who exited service shortly after the scheme became operational are not excluded.
The arrangement covers:
- Employees who retired between January 1 and September 30, 2026.
- Next-of-kin of eligible workers who died within the same period.
Affected beneficiaries will be required to process their claims through their respective Pension Fund Administrators.
A New Layer of Financial Security for Retirees
The introduction of the Exit Benefit Scheme marks one of the most significant welfare reforms for federal civil servants in recent years. By creating a dedicated account under the supervision of PenCom and the CBN, the government hopes to improve transparency, guarantee funding availability, and provide retiring workers with additional financial support beyond their pensions.
If effectively implemented, the scheme could strengthen confidence in public sector retirement benefits and offer greater financial security to thousands of federal workers after years of service.