Up to 280% hike: Good news for retirees as Ogun unveils new pension scheme

• Ogun state introduces Additional Pension Benefit, offering retirees enhanced payouts up to 280% of annual emoluments
• Governor Abiodun’s reform promised timely gratuity payments, benefiting 70-80% of retiring civil servants
• Labour leaders praised APB as a sustainable model, addressing significant pension liabilities and restoring trust

Pascal Oparada is a journalist with Legit.ng, covering technology, energy, stocks, investment, and the economy for over a decade.

Retirees in Ogun state are set to receive significantly improved benefits as Governor Dapo Abiodun introduced a new pension enhancement under the Contributory Pension Scheme (CPS).

The initiative, known as the Additional Pension Benefit (APB), offers payouts ranging from 116% to as high as 280% of a worker’s Total Annual Emoluments (TAE).

Announced during a cheque presentation ceremony at the Oba’s Complex, the governor revealed that between 70 and 80% of retiring civil and public servants would now receive higher benefits than what was previously obtainable under the old gratuity system.

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New pension scheme surpasses federal benchmark

Represented by the Secretary to the State Government, Tokunbo Talabi, Abiodun explained that the new structure surpasses the Federal Government’s 100% gratuity benchmark.

Under Ogun’s revised framework, retirees are guaranteed a minimum of 116%, with the possibility of earning up to 280% depending on their years of service.

He noted that the reform also addresses longstanding issues of delayed gratuity payments, ensuring retirees receive their entitlements promptly and with improved value.

How the new scheme works

A key feature of the APB is the introduction of a one-off lump sum payment at retirement, separate from workers’ pension savings.

Previously, retirees withdrew about 25% of their total pension savings as a lump sum, reducing their monthly pension.

Under the new arrangement, that deduction is eliminated. Instead, the APB serves as the lump sum, while the full Retirement Savings Account (RSA) balance remains intact with Pension Fund Administrators (PFAs), ThisDay said.

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This ensures stronger and more sustainable monthly pension payments for retirees.

Clearing backlogs and restoring trust

Governor Abiodun acknowledged inheriting significant pension liabilities but said his administration has taken deliberate steps to clear outstanding obligations.

This includes paying accrued arrears and ensuring retirees benefit from returns on delayed remittances.

According to a Punch report, the Commissioner for Finance, Dapo Okubadejo, disclosed that pension liabilities had surged from ₦2 billion in 2011 to over ₦20 billion by 2025 under the old Defined Benefit Scheme, highlighting its unsustainability. He added that over ₦42 billion in unpaid liabilities inherited in 2019 is being addressed.

Stakeholders applaud reform

Labour leaders and pension stakeholders have praised the initiative as a groundbreaking reform.

Representatives of the Nigeria Labour Congress and Trade Union Congress described it as a model for other states, while pension administrators commended its sustainability.

In the first phase of implementation, 111 retirees received cheques ranging from ₦17 million to ₦22 million.

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Commitment to pension sustainability

The Ogun State Government says it has so far paid ₦26.35 billion to clear gratuity backlogs, ₦5.89 billion in CPS arrears, and ₦3.19 billion in pension remittances as of January 2026.

Officials maintain that the APB initiative reflects a broader commitment to transparency, accountability, and ensuring retirees enjoy improved financial security after years of service.

Ogun finally pays long-overdue pension, gratuity

Legit.ng earlier reported that the Ogun state government has announced that it cleared pension and gratuity arrears owed to workers who retired between 2012 and 2020.

Officials said the move closed an eight-year backlog and reaffirmed the administration’s focus on the welfare of retirees.

The disclosure was made on Tuesday, February 17, by the state’s economic adviser and commissioner for Finance, Dapo Okubadejo, during a media parley organised by the Ogun State Ministry of Budget and Planning.

Proofreading by Funmilayo Aremu, copy editor at Legit.ng.

Source: Legit.ng