The Ogun State Government has unveiled a fresh pension reform designed to strengthen retirement security for public servants, approving an Additional Pension Benefit (APB) to complement the Contributory Pension Scheme (CPS) and address longstanding gaps in the system.

The initiative was announced at a high-level stakeholders’ meeting convened by the Commissioner for Finance and Chief Economic Adviser, Mr. Dapo Okubadejo, following consultations involving government officials, labour unions, Pension Fund Administrators (PFAs) and Pension Fund Management Committees.

Addressing participants, Okubadejo stressed that adherence to the CPS law is both compulsory and advantageous to workers and the state.

He clarified that while the CPS differs fundamentally from the old Defined Benefit Scheme (DBS), the administration of Dapo Abiodun remains committed to protecting workers’ interests by closing identified gaps in the contributory framework.

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According to the commissioner, the governor has approved the APB in line with existing pension laws.

He explained that although gratuity was a key feature of the DBS, the newly approved APB under the CPS is designed in a similar spirit but will be calculated differently.

The benefit will be determined using defined service-year brackets and applicable scale rates, which he said are generally more favourable to most retirees.

Okubadejo described the APB as the first initiative of its kind in Nigeria, noting that it is intended to make the CPS more attractive and to allay fears about retirement security.

He said the reform underscores the government’s proactive approach to pension administration and confidence-building among public servants.

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He further revealed that the APB will operate for a ten-year period as a compensatory measure for retirees affected by delays in the remittance of accrued pension obligations by previous administrations delays that denied them potential investment returns.

The additional benefit, he explained, is meant to cushion the impact of those lapses and provide fair financial relief.

On long-term sustainability, the commissioner observed that large lump-sum withdrawals often weaken monthly pension income.

As a result, the state plans to seek approval from the National Pension Commission to ensure pension contributions are largely preserved for monthly payments, while the APB will function as a one-off retirement benefit beginning in July 2025.

He also called on Ministries, PFAs and labour unions to improve service delivery, deepen public sensitisation and organise regular pre-retirement training programmes at least six months before workers exit service.

Earlier, Permanent Secretaries from the Bureau of State and Local Government Pensions, Mrs. Arinola Adetayo and Engr. Olufisan Osiyale, said the engagement was aimed at strengthening collaboration, resolving emerging challenges and ensuring retirees have seamless access to their benefits.

They emphasised that the CPS is a shared responsibility involving employers, employees and PFAs, and that strong synergy is critical to its success.

Speaking for organised labour, leaders of the Nigeria Labour Congress and the Trade Union Congress of Nigeria, Mr. Ademola Benco and Mr. Akeem Lasisi, respectively, praised the governor for what they described as a bold and worker-friendly reform.

They acknowledged that concerns over the adequacy of monthly pensions under the CPS had lingered for years, but said the APB directly responds to those worries.

Describing the reform as innovative and unprecedented, the labour leaders pledged full support for the new benefit structure, saying it reflects the Ogun State Government’s commitment to workers’ welfare, dignity and long-term financial security.