Ogun State Approves New Pension Benefits for Retirees

The Ogun State Government has reiterated its dedication to bolstering the welfare of both workers and retirees participating in the Contributory Pension Scheme (CPS) by endorsing an Additional Pension Benefit (APB). This initiative is designed to enhance retirement security and address existing deficiencies within the system.

This decision was brought to light during a meeting led by the Commissioner for Finance and Chief Economic Adviser, Mr. Dapo Okubadejo. This meeting followed in-depth consultations between the State Government, labor unions, Pension Fund Administrators (PFAs), and members of the Pension Fund Management Committees.

During the meeting, the commissioner highlighted that adherence to CPS regulations is not only a requirement but also advantageous for employees as well as the State. He emphasized the fundamental distinctions between the Defined Benefit Scheme (DBS) and the CPS, affirming that the Dapo Abiodun administration is committed to remedial actions to safeguard the interests of its workforce.

Mr. Okubadejo revealed that the governor had sanctioned the launch of the Additional Pension Benefit, aligning it with current legislation. He clarified that while gratuity is a component of the DBS, the APB adopts a similar ethos under the CPS but varies in its calculation method. The benefits will be computed according to specific service-year categories and applicable rates, generally favoring most retiring employees.

He characterized the APB as a pioneering initiative in Nigeria, aimed explicitly at making the CPS more appealing and assuaging concerns regarding retirement security. He stated that this approach demonstrates the government’s proactive stance on pension management and its intent to foster trust among public servants.

The commissioner further noted that the APB will be in effect for a decade to compensate retirees whose accumulated pension claims were not duly processed by previous administrations, subsequently denying them potential returns on their investments. The benefit is aimed at alleviating the financial impacts of these shortcomings and ensuring fair financial support.

Regarding its sustainability, Okubadejo mentioned that excessive lump-sum withdrawals could diminish monthly pension payments. To address this, the government intends to obtain approval from the National Pension Commission to prioritize pension savings for regular payments, while the APB will function as a one-time retirement benefit, commencing from July 2025.

He urged all relevant ministries, PFAs, and labor unions to enhance service delivery, increase public awareness, and conduct periodic pre-retirement training sessions no less than six months before employees exit service.

Additionally, the permanent secretaries of the Bureau of State and Local Government Pensions, Mrs. Arinola Adetayo and Mr. Olufisan Osiyale, stated that the discussions aimed to boost collaboration, tackle emerging issues, and guarantee seamless access to retirement benefits. They indicated that the CPS constitutes a partnership among employers, employees, and PFAs, underscoring the need for a robust collaborative effort for the scheme’s success.

In response, labor leaders from 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 courageous and employee-friendly initiative. They acknowledged concerns regarding the sufficiency of monthly pensions under the CPS had lingered for years, expressing satisfaction that the APB effectively confronts these issues.

Describing this initiative as innovative and unprecedented, the labor representatives pledged their complete support for the new retirement benefit framework, affirming it represents the administration’s steadfast commitment to ensuring the welfare, dignity, and long-term financial stability of laborers in Ogun State.