Closure compensation is different from retention allowance. Closure compensation refers to retrenchment compensation which is paid when the employment is terminated due to closure of the organisation. This will not attract PF because it is not earned by working or remaining in the service of the organisation. On the other hand, retaining allowance is an amount paid to some specially talented people during a temporary closure of the organisation just to retain their service with the company. This is an amount paid monthly even though there is no work but is paid to retain them with the company, failing which they may go and the company may not get their service when it starts production. This amount is like salary paid and therefore, will attract PF. In your case it is not retaining allowance because it is a one time payment and it is paid to sever the employee employer relationship. Therefore, there is no question of paying contribution on this amount.
Madhu.T.K