The Ogun State Government has reaffirmed its commitment to improving the welfare of workers and retirees under the Contributory Pension Scheme (CPS) with the approval of an Additional Pension Benefit (APB) designed to enhance retirement security and significantly close the existing gaps in the scheme.

This was made known during a meeting chaired by the Honourable Commissioner for Finance and Chief Economic Adviser, Mr. Dapo Okubadejo, following a series of strategic engagements between the State Government, representatives of labour unions, Pension Fund Administrators (PFAs), and members of the Pension Fund Management Committees to address concerns surrounding the implementation of the CPS and strengthen collaboration among key stakeholders. 

In his remarks, the Commissioner emphasised that compliance with the CPS law was not only mandatory but also beneficial to both employees and the State. He explained that the Defined Pension Scheme (DPS) and the Contributory Pension Scheme (CPS) were fundamentally different, adding that the Prince Dapo Abiodun-led administration was committed to bridging any identified gaps in order to protect workers’ interests.

He disclosed that Governor Dapo Abiodun, had approved the introduction of the Additional Pension Benefit (APB) in line with extant laws. According to him, the APB was specifically designed to close the gap between the CPS and the old Defined Pension Scheme, particularly in relation to gratuity, which was not provided for under the CPS.

Mr. Okubadejo further explained that lump sum withdrawals which often resulted in reduced monthly pension payments, informed the Government decision to develop a more sustainable structure, saying that with the introduction of the APB, Government intended to seek necessary approvals from the National Pension Commission (PENCOM) to ensure that pension contributions held by PFAs were preserved primarily for enhanced monthly payments, while the APB would serve as a one-off payment upon retirement.

“Unlike gratuity under the DPS, the APB would not be a fixed percentage. Instead, it will be computed based on specific criteria, including years of service and gross emoluments, to ensure fairness and equity among retirees. The benefit is scheduled to take effect from July 2026,” he said.

The Commissioner charged the Ministries involved in pension, PFAs, Labour unions to improve service delivery, intensify public enlightenment campaigns, and organize regular pre-retirement training sessions for workers at least six months before retirement to enhance their understanding of the pension scheme. 

In their opening remarks, Permanent Secretaries of the State and Local Government Pension Offices, Mrs. Arinola Adetayo and Mr. Engr. Olufisan Osiyale, explained that the engagements were convened to deepen relationships, resolve emerging challenges and ensure seamless access to retirement benefits.

They described the CPS as a tripod, resting on three critical stakeholders, the employer, the employee and the Pension Fund Administrators, stressing that effective synergy among them was essential for the success of the scheme. 

 Noting further, the Permanent Secretaries said that government had consistently demonstrated goodwill in addressing workers’ concerns, ensuring that retirees do not face uncertainty or financial hardship after years of service.

Responding on behalf of the Labour Unions, Chairman of the Nigeria Labour Congress (NLC), Ogun State Council, Mr. Ademola Benco and Chairman of the Trade Union Congress (TUC), Mr. Akeem Lasisi, commended Governor Dapo Abiodun for what they described as a bold, thoughtful and worker-friendly initiative.

They noted that labour’s longstanding concern had been the sustainability and adequacy of monthly pension payments under the Contributory Pension Scheme (CPS), but expressed satisfaction that the introduction of the Additional Pension Benefit (APB) had effectively addressed those fears.

Describing the initiative as innovative and unprecedented, the labour leaders affirmed their full support for the reform and the proposed structure for retirement benefits, adding that it reflected the administration’s commitment to the welfare and financial security of workers in the State.