Ogun retirees to earn up to 280% benefits under new pension scheme, says Abiodun

Ogun State has raised the bar on pension payouts, with retirees now set to receive between 116 per cent and 280 per cent of their Total Annual Emoluments (TAE) under a new reform that significantly outpaces the traditional 100 per cent gratuity benchmark.

Governor Dapo Abiodun revealed that the enhanced benefits will be delivered through the Additional Pension Benefit (APB) initiative, a policy designed to boost retirement earnings while preserving long-term pension stability. The figures, he said, represent a deliberate shift from past practices, where gratuity payments were not only lower but often delayed.

Under the new structure, Ogun’s minimum payout stands at 116 per cent of TAE, with some retirees earning as much as 280 per cent depending on their years of service, nearly three times the federal gratuity equivalent.

The governor noted that between 70 and 80 per cent of retirees will now receive more than what was previously obtainable, marking a substantial financial uplift for the majority of exiting workers.

Represented by the Secretary to the State Government, Tokunbo Talabi, Abiodun explained that the reform directly addresses long-standing inefficiencies in pension administration.

He said: “Our minimum is 116 per cent, rising to 280 per cent, which is significantly higher than the 100 per cent benchmark. More importantly, these payments will be timely.

“The reform also restructures how retirement benefits are accessed. Previously, retirees drew about 25 per cent of their Retirement Savings Account (RSA) as a lump sum, reducing what remained for monthly pensions. Under the APB model, that withdrawal is replaced by a separate lump-sum payment, allowing the full pension contributions to remain invested with Pension Fund Administrators. The result is a dual advantage, larger upfront benefits and stronger monthly pension flows.

The government further backed its claims with figures showing sustained financial intervention in the pension system.

“Since assuming office, the administration has paid N26.35 billion to clear outstanding gratuities, remitted N5.89 billion in pension deduction arrears alongside accrued returns, and disbursed N500 million in death benefits.”

 In addition, N3.19 billion has been committed to Contributory Pension Scheme (CPS) remittances as of January 2026.

“The scale of past liabilities underscores the significance of the reform. Pension obligations under the old Defined Benefit Scheme ballooned from N2 billion for about 8,198 retirees in 2011 to over N20 billion for more than 16,000 retirees by 2025. By 2019, the state had accumulated over N42 billion in unpaid liabilities, figures that exposed the unsustainability of the previous system.

Commissioner for Finance and Chief Economic Adviser, Dapo Okubadejo, said the new framework is a response to those structural weaknesses.

He noted that the APB was introduced following extensive consultations after the full rollout of the CPS in July 2025, which initially triggered concerns over reduced lump-sum benefits.

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At the rollout event, 111 retirees receiving cheques ranging from N17 million to N22 million in the first phase. The payments were calculated using approved rates applied to each retiree’s TAE, reinforcing the transparency of the system.

Representatives of the Nigeria Labour Congress and Trade Union Congress said the scheme sets a new national benchmark, while the Nigeria Union of Pensioners called for strict transparency to sustain confidence.

Officials from Pension Fund Administrators and the National Pension Commission also endorsed the model, describing it as a bold reform that strengthens retirement security without undermining the contributory framework.