The Ogun State Government has approved an Additional Pension Benefit (APB) for workers and retirees under the Contributory Pension Scheme (CPS), in a move aimed at strengthening retirement security and addressing gaps in the existing system.
The decision was announced after a strategic meeting involving government officials, labour unions, Pension Fund Administrators (PFAs) and members of the Pension Fund Management Committees. The meeting was chaired by the Commissioner for Finance and Chief Economic Adviser, Dapo Okubadejo.
Speaking at the session, Okubadejo said the approval reflects the administration’s commitment to improving workers’ welfare and ensuring full compliance with the CPS law. He noted that while the former Defined Benefit Scheme (DBS) provided for gratuity payments, the newly introduced APB under the CPS is designed in a similar spirit, though structured differently in terms of computation.
According to him, the APB will be calculated using defined service-year brackets and applicable scale rates, which he said would be favourable to most retiring workers. He described the initiative as the first of its kind in Nigeria and aimed at boosting confidence in the CPS framework.
The Commissioner explained that the benefit would run for ten years as a compensatory measure for retirees affected by delays in the remittance of accrued pension obligations by previous administrations. He said the initiative is intended to cushion the impact of those lapses and provide equitable financial relief.
On sustainability, Okubadejo noted that large lump-sum withdrawals often reduce retirees’ monthly pension income. He disclosed that the state would seek approval from the National Pension Commission to prioritise the preservation of pension contributions for steady monthly payments, while the APB would serve as a one-off retirement benefit effective from July 2025.
He also urged ministries, PFAs and labour unions to intensify public awareness and organise regular pre-retirement training programmes at least six months before workers exit service.
Permanent Secretaries from the Bureau of State and Local Government Pensions said the engagement was aimed at strengthening collaboration and resolving emerging challenges within the scheme, describing the CPS as a partnership among employers, employees and PFAs.
Leaders of the Nigeria Labour Congress and the Trade Union Congress in the state commended the government for what they described as a bold reform, noting that concerns over the adequacy of pensions under the CPS had lingered for years. They pledged support for the new structure, saying it demonstrates a renewed commitment to workers’ welfare and long-term financial security in Ogun State.