Olawunmi Ajibike
The Ogun State Government has unveiled a revamped pension structure aimed at significantly improving retirees’ welfare, with benefits now ranging between 116 per cent and 280 per cent of Total Annual Emoluments (TAE).
Governor Dapo Abiodun made this known on Tuesday during the presentation of cheques to retirees at the Oba’s Complex, describing the initiative as a major reform under the Contributory Pension Scheme (CPS).
The governor was represented at the event by the Secretary to the State Government, Tokunbo Talabi.
According to him, the newly introduced Additional Pension Benefit (APB) ensures that a large percentage of retiring workers—estimated at between 70 and 80 per cent—will receive higher payouts than what was previously obtainable under the gratuity system.
He explained that while the Federal Government benchmark for gratuity stands at 100 per cent of a retiree’s final annual salary, Ogun State has raised the bar by offering a minimum of 116 per cent, with some retirees eligible for up to 280 per cent depending on their years of service.
Abiodun noted that the reform also addresses the long-standing issue of delayed gratuity payments, assuring retirees of prompt and improved benefits under the new system.
The governor acknowledged the significant pension liabilities inherited by his administration but stressed that deliberate efforts have been made to clear outstanding obligations and ensure retirees benefit from accrued returns on delayed remittances.
Under the APB framework, retirees receive a one-time lump sum payment while their full pension contributions remain untouched with Pension Fund Administrators, thereby boosting their monthly pension earnings.
He added that the new structure eliminates the previous practice where a portion of pension savings was withdrawn as a lump sum, allowing the entire contribution to generate better long-term returns.
Reaffirming his administration’s commitment, Abiodun described retirees’ welfare as a moral responsibility, even amid competing financial pressures.
The Head of Service, Kehinde Onasanya, described the initiative as a transformative step that effectively bridges the gap between the old Defined Benefit Scheme and the CPS, providing immediate financial relief to retirees.
Similarly, the Chief Economic Adviser and Commissioner for Finance, Dapo Okubadejo, highlighted the challenges faced under the previous pension system, noting that liabilities grew from ₦2 billion for about 8,198 retirees in 2011 to over ₦20 billion for more than 16,000 retirees by 2025.
He added that the state inherited over ₦42 billion in unpaid pension obligations in 2019 but has since made significant progress in clearing the backlog and restoring confidence in the system.
Labour leaders and pension stakeholders commended the initiative, describing it as innovative and a potential model for other states, while also calling for transparency in its execution.
At the event, 111 retirees received cheques ranging from ₦17 million to ₦22 million in the first phase of the programme, with payments calculated based on agreed rates applied to their Total Annual Emoluments.
The APB initiative was introduced following extensive consultations with labour unions, pension administrators, and government officials after the full rollout of the CPS in Ogun State in July 2025.
Officials say the reform is designed to ensure sustainability in the pension system while providing retirees with improved financial security and a more reliable income in retirement.