Ogun approves additional pension benefit to boost retirees’ security
The Ogun State Government has reaffirmed its commitment to improving the welfare of workers and retirees under the Contributory Pension Scheme (CPS) with the approval of an Additional Pension Benefit (APB) aimed at strengthening retirement security and addressing existing gaps in the scheme.
The development was disclosed at a meeting chaired by the Commissioner for Finance and Chief Economic Adviser, Mr. Dapo Okubadejo, following engagements involving the State Government, labour unions, Pension Fund Administrators (PFAs), and members of the Pension Fund Management Committees.
Okubadejo emphasised that compliance with the CPS law is mandatory and beneficial to both employees and the State. He explained that the Defined Benefit Scheme (DBS) differs fundamentally from the CPS, noting that the administration remains committed to safeguarding workers’ interests by addressing identified shortcomings.
He revealed that Governor Dapo Abiodun approved the introduction of the APB in line with existing laws. While gratuity was a feature of the DBS, he said the APB under the CPS is similarly structured but differs in computation, using defined service-year brackets and scale rates considered favourable to most retirees.
Describing the APB as the first of its kind in Nigeria, the Commissioner said it was designed to make the CPS more attractive and ease concerns about retirement security, reflecting the government’s proactive approach to pension administration.
He explained that the APB would run for ten years as compensation for retirees whose accrued pension obligations were not promptly remitted by previous administrations, depriving them of potential investment returns. The measure is intended to cushion the effects of those lapses and provide equitable relief.
On sustainability, Okubadejo noted that large lump-sum withdrawals often reduce monthly pensions. The government therefore plans to seek approval from the National Pension Commission to preserve contributions mainly for monthly payments, while the APB will serve as a one-off benefit effective from July 2025.
He also urged ministries, PFAs and labour unions to intensify sensitisation and organise pre-retirement training at least six months before exit.
Labour leaders, including representatives of the Nigeria Labour Congress and the Trade Union Congress of Nigeria, commended the Governor for the initiative, describing it as bold and worker-friendly. They expressed satisfaction that the APB addresses longstanding concerns over pension adequacy and pledged full support for the new structure.
