The Ogun State Government has approved an Additional Pension Benefit (APB) for workers and retirees under the Contributory Pension Scheme (CPS), reaffirming its commitment to strengthening retirement security and addressing gaps in the system.
The development was announced at a high-level meeting chaired by the Honourable Commissioner for Finance and Chief Economic Adviser, Mr. Dapo Okubadejo, following strategic engagements with labour unions, Pension Fund Administrators (PFAs), and members of the Pension Fund Management Committees.
Speaking at the meeting, Okubadejo emphasized that compliance with the CPS law remains both mandatory and beneficial to employees and the state. He explained that the Defined Benefit Scheme (DBS) and the CPS operate on fundamentally different structures, noting that the administration of Dapo Abiodun is determined to close identified gaps to better protect workers’ interests.
According to the Commissioner, the Governor has approved the introduction of the APB in line with existing laws. While gratuity was a feature of the DBS, he clarified that the APB under the CPS is structured in a similar spirit but differs in computation. The benefit will be calculated using defined service-year brackets and applicable scale rates, which he said are generally more favourable to most retiring workers.
Okubadejo described the APB as the first initiative of its kind in Nigeria, designed to make the CPS more attractive and to ease long-standing concerns about retirement income adequacy. He added that the measure reflects the government’s proactive approach to pension administration and its effort to build confidence among public servants.
He further disclosed that the APB would run for ten years as a compensatory mechanism for retirees whose accrued pension obligations were not promptly remitted by previous administrations, thereby denying them potential investment returns. The initiative, he explained, is intended to cushion the financial impact of those lapses and provide equitable relief.
On sustainability, the Commissioner warned that large lump-sum withdrawals often reduce monthly pension payouts. Consequently, the government plans to seek approval from the National Pension Commission to preserve pension contributions primarily for monthly payments, while the APB will function as a one-off retirement benefit effective from July 2025.
He also urged relevant ministries, PFAs, and labour unions to strengthen service delivery, intensify public sensitization, and institutionalize pre-retirement training programmes at least six months before workers exit service.
Earlier, Permanent Secretaries from the Bureau of State and Local Government Pensions, Mrs. Arinola Adetayo and Engr. Olufisan Osiyale, stated that the engagements were aimed at enhancing collaboration, resolving operational challenges, and ensuring seamless access to retirement benefits. They described the CPS as a tripartite partnership involving the employer, employee, and PFAs, stressing that synergy remains crucial for its success.
Responding on behalf of organised labour, leaders of the Nigeria Labour Congress and the Trade Union Congress of Nigeria, Mr. Ademola Benco and Mr. Akeem Lasisi, commended the Governor for what they termed a bold and worker-friendly reform.
They acknowledged that concerns over the adequacy of monthly pensions under the CPS had lingered for years but expressed satisfaction that the APB directly addresses those issues. Describing the initiative as innovative and unprecedented, the labour leaders pledged full support for the new retirement benefit structure, saying it underscores the administration’s commitment to workers’ welfare, dignity, and long-term financial stability in Ogun State.