In a major step to enhance retirees' welfare, Ogun State Governor Dapo Abiodun has launched the Additional Pension Benefit (APB) initiative under the Contributory Pension Scheme (CPS).
The new scheme provides retirees with a one-off lump sum payment ranging from 116% to 280% of their Total Annual Emoluments (TAE), far surpassing the federal government's standard gratuity benchmark of 100% of final annual salary.
The governor announced the reform during the official presentation of cheques to 111 retirees at the Oba’s Complex in Abeokuta. Beneficiaries received payments between N17 million and N22 million in the first phase, based on agreed calculations tied to years of service.
Under the APB, the lump sum serves as an enhanced gratuity equivalent, eliminating the previous practice of deducting about 25% from pension savings for a lump sum withdrawal.
This preserves full contributions in Retirement Savings Accounts (RSAs) with Pension Fund Administrators (PFAs), resulting in stronger and more sustainable monthly pension payments.
Governor Abiodun, represented by Secretary to the State Government Tokunbo Talabi, emphasized that the minimum benefit starts at 116% and can reach up to 280% depending on length of service.
He noted that 70% to 80% of retiring workers will receive higher benefits than before, describing the move as a fulfillment of the administration's moral obligation to prioritize pensioners' welfare despite fiscal challenges.
The initiative follows full CPS implementation in the state on July 2, 2025, and extensive consultations with organized labour, pension administrators, and government officials.
It addresses historical gaps between the old Defined Benefit Scheme and the CPS, including delayed gratuity payments and eroded benefits due to past non-remittances.
The Abiodun administration has cleared substantial inherited liabilities, including over N26 billion in outstanding gratuities, N5.89 billion in CPS arrears and returns, and other payments to restore trust and ensure timely benefits.
Head of Service Kehinde Onasanya called the APB a "game changer" that provides immediate financial security upon retirement while bridging longstanding scheme disparities.
This reform marks a significant improvement in retirees' financial security in Ogun State, setting a positive precedent for pension management in Nigeria.
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