Retirees to receive up to 280% benefits under new pension scheme
Retirees to receive up to 280% benefits under new pension scheme
The Ogun State Government has unveiled a new initiative designed to improve retirement benefits for workers under the Contributory Pension Scheme (CPS), promising significantly higher payouts through the introduction of an Additional Pension Benefit (APB) framework.
Governor Dapo Abiodun disclosed the development on Tuesday during the presentation of retirement benefit cheques to former civil servants at the Oba’s Complex.
The governor, who was represented by the Secretary to the State Government, Tokunbo Talabi, said the initiative guarantees retirees between 116 per cent and 280 per cent of their Total Annual Emoluments (TAE) as additional retirement benefits.
According to him, the new structure means most retiring workers in the state will receive higher benefits than what was previously paid as gratuity.
“What this means is that, unlike in the past when gratuity payments were delayed, retirees will now receive improved and timely benefits. Our minimum is 116 per cent, going up to 280 per cent, which is significantly higher than the 100 per cent benchmark,” he said.
Abiodun noted that his administration inherited huge pension and gratuity liabilities but has taken steps to gradually address them while improving the welfare of retirees.
He explained that, beyond clearing backlogs, the government ensured retirees benefited from returns on previously delayed pension remittances.
The governor added that under the APB arrangement, retirees would receive a one-time lump sum as an additional pension benefit, while their entire pension contributions remain with their Pension Fund Administrators, which would translate to higher monthly pension payments.
“Previously, about 25 per cent of total pension savings would be taken as a lump sum. Now, that deduction is no longer necessary, as the APB serves as the lump sum, leaving the full contributions to generate stronger monthly pension payments,” he added.
He reaffirmed his administration’s commitment to prioritising the welfare of retirees despite other financial obligations facing the state government.
In his remarks, the Head of Service, Kehinde Onasanya, described the initiative as a major reform capable of easing the transition between the old Defined Benefit Scheme and the CPS.
He said the initiative is a “game changer” that bridges the gap between the two pension systems and ensures retirees receive immediate financial support after leaving service.
Representatives of the National Pension Commission and pension fund administrators also commended the scheme, describing it as a bold step toward strengthening retirement security in the state.
During the event, cheques ranging between ₦17 million and ₦22 million were presented to 111 retirees in the first phase of the programme.
The payments were calculated using agreed rates applied to each retiree’s Total Annual Emolument.
The APB scheme was introduced after concerns emerged following the full implementation of the Contributory Pension Scheme in Ogun State on July 2, 2025.
The initiative was subsequently adopted after consultations involving organised labour unions, pension administrators and government officials.
Under the framework, retirees will receive the Additional Pension Benefit as a one-off payment upon retirement, while the funds in their Retirement Savings Accounts (RSAs) remain intact to enhance their monthly pensions.
The state government also highlighted several financial interventions it has made in the pension sector.
These include ₦26.35 billion paid to offset outstanding gratuity liabilities, ₦5.89 billion remitted as arrears of CPS deductions and accrued returns, ₦500 million paid as death benefits, and ₦3.19 billion paid as CPS remittances as of January 2026.
According to the government, the measures demonstrate its commitment to transparency, accountability and the long-term sustainability of the pension system while ensuring improved welfare and financial security for retirees.
