The Ogun State Government has unveiled a new pension enhancement initiative that will significantly increase retirement benefits for civil and public servants under the Contributory Pension Scheme (CPS).
Governor Dapo Abiodun announced the introduction of the Additional Pension Benefit (APB) during a cheque presentation ceremony for retirees held at the Oba’s Complex.
Represented by Tokunbo Talabi, the secretary to the State Government, the governor revealed that the initiative will deliver benefits ranging from 116 per cent to as high as 280 per cent of retirees’ Total Annual Emoluments (TAE).
He noted that between 70 and 80 per cent of retiring workers in the state are expected to receive higher gratuities under the new arrangement.
According to him, while the federal benchmark provides gratuity equivalent to 100 per cent of a retiree’s final annual salary, Ogun State has surpassed this by setting a minimum of 116 per cent, with higher payouts tied to years of service.
He stated,
“What this means is that, unlike in the past when gratuity payments were delayed, retirees will now receive improved and timely benefits.
“Our minimum is 116 per cent, going up to 280 per cent, which is significantly higher than the 100 per cent benchmark.”
Abiodun said his administration inherited substantial pension and gratuity liabilities but had since taken deliberate steps to address them comprehensively.
He said beyond settling outstanding obligations, the government ensured that retirees received returns on delayed remittances, thereby enhancing the value of their entitlements.
He explained that under the new framework, retirees now received a one-off lump sum as Additional Pension Benefit, while their full pension contributions remained intact with Pension Fund Administrators (PFAs), leading to improved monthly pension payments.
The governor added,
“Previously, about 25 per cent of total pension savings would be taken as a lump sum. Now, that deduction is no longer necessary, as the APB serves as the lump sum, leaving the full contributions to generate stronger monthly pension payments.”
He reaffirmed that despite competing fiscal demands, his administration had prioritised retirees’ welfare, describing their well-being as a moral obligation.
In his remarks, Head of Service, Kehinde Onasanya, described the initiative as a “game changer” that bridged the gap between the old Defined Benefit Scheme and CPS, ensuring retirees receive immediate financial support upon exit from service.
Dapo Okubadejo, chief economic adviser and commissioner for Finance, traced the evolution of pension administration in the state, saying the CPS, introduced in 2008, faced funding challenges that eroded public trust.
Okubadejo revealed that pension liabilities under the old Defined Benefit Scheme rose sharply, from N2 billion for about 8,198 retirees in 2011 to over N20 billion for more than 16,000 retirees by 2025, highlighting the unsustainability of the previous system.
He added that the state inherited over N42 billion in unpaid pension liabilities as of 2019 but had since taken decisive steps to clear the backlog and restore confidence.
Labour leaders, including Ahmed Benco of Nigeria Labour Congress (NLC) and Akeem Lasisi of Trade Union Congress (TUC), commended the initiative, describing it as the first of its kind in the country and a model for other states.
Similarly, Waheed Oloyede, chairman of Nigeria Union of Pensioners, lauded the programme as a major step towards improving retirees’ welfare, while calling for transparency in its implementation.
Representatives of Pension Fund Administrators and National Pension Commission also described the scheme as a bold and innovative reform that strengthened retirement security.
At the event, cheques ranging from N17 million to N22 million were presented to 111 beneficiaries in the first phase of disbursement. the computation was based on agreed rates applied on Total Annual Emolument (TAE)
The APB initiative followed concerns raised by stakeholders after the full implementation of the CPS in Ogun State on July 2, 2025. It was subsequently adopted after extensive consultation involving organised labour, pension administrators, and government officials.
Stakeholders described the initiative as a sustainable mechanism to bridge gaps between CPS and the former Defined Benefit Scheme, particularly in addressing gratuity-related concerns.
Under the framework, APB is structured as a one-off payment at retirement, while balances in retirees’ Retirement Savings Accounts (RSAs) are preserved to enhance their monthly pensions.
Ogun State Government also recorded significant interventions in the pension sector, including N26.35 billion paid to offset outstanding gratuity liabilities, N5.89 billion remitted as arrears of CPS deductions and accrued returns, N500 million paid as death benefits, and N3.19 billion in CPS remittances as of January 2026.
The government said the measures underscored its commitment to transparency, accountability, and long-term sustainability of the pension system.
