Ogun State Approves Additional Pension Benefit for Workers and Retirees

The Ogun State Government has reaffirmed its commitment to enhancing the welfare of workers and retirees under the Contributory Pension Scheme (CPS) with the approval of an Additional Pension Benefit (APB). The initiative aims to strengthen retirement security and close existing gaps within the scheme, reflecting the government's ongoing focus on worker well-being.

The announcement was made during a meeting chaired by the Honourable Commissioner for Finance and Chief Economic Adviser, Mr. Dapo Okubadejo. This followed strategic discussions involving the State Government, labour unions, Pension Fund Administrators (PFAs), and members of the Pension Fund Management Committees. The discussions highlighted the importance of compliance with the CPS law, which Mr. Okubadejo emphasized as both mandatory and beneficial for employees and the state.

In his address, Mr. Okubadejo explained the differences between the Defined Benefit Scheme (DBS) and the CPS, with the latter designed to be more sustainable. He outlined that the introduction of the APB was in line with existing laws and aimed to address identified gaps in the system. The benefit, which is based on service-year brackets and scale rates, is expected to provide more favourable terms for most retiring workers compared to previous systems.

Mr. Okubadejo also described the APB as a pioneering initiative in Nigeria, designed to bolster confidence in the CPS and alleviate concerns surrounding retirement security. He explained that the APB would operate for ten years as compensation for retirees who had not received timely pension remittances from previous administrations, thereby missing out on potential investment returns.

To ensure the sustainability of the scheme, the Commissioner stated that large lump-sum withdrawals would be discouraged to preserve monthly pension income. As such, the government intends to seek approval from the National Pension Commission to ensure that pension contributions remain primarily for monthly payments, while the APB will serve as a one-off benefit, effective from July 2025. Additionally, the government urged stakeholders to enhance service delivery, increase public sensitization, and organize pre-retirement training programs to support workers as they transition into retirement.