Ogun State Boosts Retirees' Benefits with Up to 280% Salary Increase

The Ogun State Government has announced a considerable enhancement in pension benefits for retirees in the civil and public service sector. This increase is a result of the new Additional Pension Benefit (APB) initiative, offering payouts between 116% and 280% of Total Annual Emoluments (TAE) under the Contributory Pension Scheme (CPS).

Governor Dapo Abiodun made the announcement on Tuesday during an official cheque presentation ceremony for retirees at the Oba’s Complex.

Represented by the Secretary to the State Government, Tokunbo Talabi, the governor emphasized that 70 to 80 percent of retiring employees would now benefit from higher retirement packages compared to the previous gratuity schemes.

He explained that while the Federal Government provides a gratuity equal to 100% of the final annual salary, Ogun State has gone well beyond this by guaranteeing a minimum of 116%, which can increase to as much as 280%, depending on the duration of service.

Governor Abiodun highlighted that this ensures retirees receive improved and timely benefits, eliminating delays that once characterized gratuity payments. The new minimum is significantly more than the existing 100% benchmark.

The governor addressed the substantial pension liabilities and gratuity obligations inherited by his administration, noting that significant measures have been taken to tackle these issues effectively.

In addition, he pointed out that the government has worked to ensure that retirees receive returns on past remittances, increasing the value of their pension benefits.

Under the APB framework, retirees will now receive a one-off lump sum as their Additional Pension Benefit, with their full pension contributions preserved with Pension Fund Administrators (PFAs), leading to enhanced monthly pension disbursements.

He further clarified that previously, about 25% of the total pension savings would need to be taken as a lump sum upon retirement, but with the APB this is no longer necessary.

This proactive approach is designed to prioritize the welfare of retirees, which the governor described as a moral imperative for his administration.

In his address, the Head of Service, Kehinde Onasanya, hailed the initiative as a transformative measure that reconciles the older Defined Benefit Scheme with the CPS, providing immediate financial support for retirees.

The Chief Economic Adviser and Commissioner for Finance, Dapo Okubadejo, overviewed the history of pension administration in Ogun State, mentioning the challenges encountered with the CPS introduced in 2008, which raised public concerns due to funding issues.

He reported that pension liabilities under the previous scheme skyrocketed from ₦2 billion in 2011 for approximately 8,198 retirees to over ₦20 billion for more than 16,000 retirees by 2025, underscoring the previous system's unsustainability.

Mr. Okubadejo noted that the state had inherited over ₦42 billion in unpaid pension liabilities by 2019 but has since taken concrete actions to reduce this backlog and rebuild trust.

Labour leaders, including Ahmed Benco of the Nigeria Labour Congress and Akeem Lasisi of the Trade Union Congress, praised the initiative, calling it unprecedented in Nigeria and a model for other states.

Similarly, Nigeria Union of Pensioners Chairman Waheed Oloyede recognized the program as a monumental step towards enhancing retirees' welfare and advocating for transparency in its rollout.

Affirmations from representatives of Pension Fund Administrators and the National Pension Commission indicated that the APB is a bold reform that fortifies retirees' financial security.

During the event, 111 beneficiaries received cheques ranging from ₦17 million to ₦22 million in the initial round of disbursements based on accepted rates calculated against Total Annual Emoluments (TAE).

The APB initiative addresses concerns expressed by stakeholders following the full implementation of the CPS in Ogun State on July 2, 2025, resulting from extensive discussions with organized labour, pension fund administrators, and government officials.

This initiative has been hailed as a sustainable approach to bridging the gaps between the new CPS and the older Defined Benefit Scheme, particularly in resolving pension benefit issues.

The framework outlines that the APB will be distributed as a one-time payment at retirement, with remaining balances in retirees' Retirement Savings Accounts (RSAs) preserved to bolster their regular pension payments.

Additionally, the Ogun State Government has made significant strides in the pension sector, including the payment of ₦26.35 billion to clear outstanding gratuities, ₦5.89 billion in CPS deduction arrears and interests, ₦500 million for death benefits, and ₦3.19 billion in CPS contributions by January 2026.

These actions reflect the government's ongoing commitment to ensuring transparency, accountability, and the long-term viability of the pension system while guaranteeing better welfare and financial security for retirees.