The Ogun State Government has approved an Additional Pension Benefit (APB) to enhance the welfare of workers and retirees under the Contributory Pension Scheme (CPS), in a move aimed at strengthening retirement security and addressing identified gaps in the system.
The decision was disclosed at a meeting chaired by the Commissioner for Finance and Chief Economic Adviser, Mr. Dapo Okubadejo, following strategic engagements involving the state government, labour unions, Pension Fund Administrators (PFAs), and members of the Pension Fund Management Committees.
Mr. Okubadejo stated that compliance with the CPS law is both mandatory and beneficial to employees and the state. He explained that the Defined Benefit Scheme (DBS) differs fundamentally from the CPS, noting that the administration of Governor Dapo Abiodun remains committed to safeguarding workers’ interests by addressing shortcomings in the contributory framework.
According to the commissioner, the governor approved the introduction of the Additional Pension Benefit in line with existing laws. While gratuity was a feature of the former Defined Benefit Scheme, he said the APB under the CPS is conceived in a similar spirit but differs in its computation.
He explained that the benefit would be calculated using defined service-year brackets and applicable scale rates, which are generally more favourable to most retiring workers.
Mr. Okubadejo described the APB as the first initiative of its kind in Nigeria, designed to make the CPS more attractive and to address longstanding concerns about retirement security among public servants.
He added that the measure would run for 10 years as a compensatory intervention for retirees whose accrued pension contributions were not promptly remitted by previous administrations, resulting in lost investment returns.
“The benefit is intended to cushion the effects of those lapses and provide equitable financial relief,” he said.
On sustainability, the commissioner observed that large lump-sum withdrawals often reduce monthly pension income. He disclosed that the government intends to seek approval from the National Pension Commission to prioritise the preservation of pension contributions for monthly payments, while the APB would serve as a one-off retirement benefit effective from July 2025.
Mr. Okubadejo urged relevant ministries, PFAs, and labour unions to enhance service delivery, intensify public sensitisation, and organise pre-retirement training programmes at least six months before workers exit service.
Earlier, the Permanent Secretaries of the Bureau of State and Local Government Pensions, Mrs. Arinola Adetayo and Mr. Olufisan Osiyale, said the engagements were designed to strengthen collaboration, resolve emerging challenges, and ensure seamless access to retirement benefits.
They described the CPS as a tripartite partnership involving the employer, employee, and PFAs, stressing that strong synergy is essential to the scheme’s success.
Responding on behalf of organised labour, the state leaders of the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC), Mr. Ademola Benco and Mr. Akeem Lasisi, commended the governor for what they described as a bold and worker-friendly reform.
They noted that concerns over the adequacy of monthly pensions under the CPS had persisted for years, but expressed satisfaction that the Additional Pension Benefit directly addresses those challenges.
The labour leaders pledged full support for the new structure, describing it as innovative and reflective of the administration’s commitment to workers’ welfare, dignity, and long-term financial security in Ogun State.
