Ogun State Launches Revolutionary Pension Enhancement for Retirees
In a landmark move to bolster retirement security, Ogun State has officially rolled out the Additional Pension Benefit (APB), a new pension enhancement under the Contributory Pension Scheme (CPS). Governor Dapo Abiodun announced this initiative, which promises retirees significantly improved payouts, ranging from 116 per cent to as high as 280 per cent of their Total Annual Emoluments (TAE). This reform marks a substantial upgrade from previous systems, aiming to provide better financial stability for public servants after years of service.
Governor Abiodun's Commitment to Pension Reform
Governor Dapo Abiodun, represented by the Secretary to the State Government, Tokunbo Talabi, unveiled the APB during a cheque presentation ceremony at the Oba's Complex. He emphasized that this new structure surpasses the Federal Government's benchmark of 100 per cent gratuity, ensuring that between 70 and 80 per cent of retiring civil and public servants receive higher benefits than under the old gratuity system. The governor highlighted that the reform addresses long-standing issues of delayed gratuity payments, guaranteeing retirees receive their entitlements promptly and with enhanced value.
How the Additional Pension Benefit Works
The APB introduces a one-off lump sum payment at retirement, which is separate from workers' pension savings. Previously, retirees typically withdrew about 25 per cent of their total pension savings as a lump sum, which reduced their monthly pension. Under the new arrangement, this deduction is eliminated. Instead, the APB serves as the lump sum, while the full Retirement Savings Account (RSA) balance remains intact with Pension Fund Administrators (PFAs). This ensures stronger and more sustainable monthly pension payments for retirees, providing a more robust financial cushion in their post-service years.
Clearing Pension Liabilities and Restoring Trust
Governor Abiodun acknowledged inheriting significant pension liabilities from previous administrations but stated that his government has taken deliberate steps to clear outstanding obligations. This includes paying accrued arrears and ensuring retirees benefit from returns on delayed remittances. The Commissioner for Finance, Dapo Okubadejo, revealed that pension liabilities had surged from ₦2 billion in 2011 to over ₦20 billion by 2025 under the old Defined Benefit Scheme, underscoring its unsustainability. He added that over ₦42 billion in unpaid liabilities inherited in 2019 is being systematically addressed, with the state having paid ₦26.35 billion to clear gratuity backlogs, ₦5.89 billion in CPS arrears, and ₦3.19 billion in pension remittances as of January 2026.
Stakeholder Appraisal and Implementation
Labour leaders and pension stakeholders have widely praised the APB initiative as a groundbreaking reform. Representatives from the Nigeria Labour Congress and Trade Union Congress described it as a model for other states to emulate, while pension administrators commended its sustainability and transparency. In the first phase of implementation, 111 retirees received cheques ranging from ₦17 million to ₦22 million, demonstrating the tangible benefits of the new scheme. This move is part of a broader commitment by the Ogun State Government to ensure retirees enjoy improved financial security, with officials reaffirming their focus on welfare and accountability.
Background on Pension Clearance Efforts
Earlier reports indicated that the Ogun State Government has cleared pension and gratuity arrears owed to workers who retired between 2012 and 2020, closing an eight-year backlog. This disclosure was made by the state's economic adviser and commissioner for Finance, Dapo Okubadejo, during a media parley organized by the Ogun State Ministry of Budget and Planning. The initiative reflects the administration's dedication to addressing historical pension challenges and enhancing the quality of life for retirees across the state.
