The Ogun State Government has commenced the implementation of a new pension framework with the disbursement of benefits running into millions of naira, as part of efforts to improve retirees’ welfare and restore confidence in the system.
Governor Dapo Abiodun made this known on Tuesday during the presentation of cheques to beneficiaries at the Oba’s Complex, where retirees received payments ranging from ₦17 million to ₦22 million in the first phase of the programme.
Represented by the Secretary to the State Government, Tokunbo Talabi, the governor said the newly introduced Additional Pension Benefit initiative was designed to ensure retirees enjoy improved and timely access to their entitlements. He stated, “Our minimum is 116 per cent, going up to 280 per cent, which is significantly higher than the 100 per cent benchmark obtainable elsewhere.”
He explained that between 70 and 80 per cent of retiring workers would earn more under the new scheme compared to what was obtainable under the old gratuity system, noting that the reform eliminates delays that previously characterised pension payments.
Abiodun said his administration met huge pension liabilities on assumption of office but had taken deliberate steps to clear outstanding obligations while also ensuring retirees benefit from accrued returns on delayed remittances.
Under the new framework, retirees receive a one-off lump sum through the Additional Pension Benefit, while their full pension contributions remain intact with Pension Fund Administrators, allowing for stronger and more sustainable 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,” he added.
The Head of Service, Kehinde Onasanya, described the initiative as a major shift in pension administration, saying it effectively bridges the gap between the old Defined Benefit Scheme and the Contributory Pension Scheme.
Also speaking, the Chief Economic Adviser and Commissioner for Finance, Dapo Okubadejo, traced the challenges faced under the previous system, revealing that pension liabilities rose from ₦2 billion for about 8,198 retirees in 2011 to over ₦20 billion for more than 16,000 retirees by 2025.
He further disclosed that the state inherited over ₦42 billion in unpaid pension liabilities in 2019, adding that decisive actions taken by the current administration have helped to reduce the backlog and rebuild trust.
Labour leaders, including representatives of the Nigeria Labour Congress and the Trade Union Congress, commended the initiative, describing it as a model for other states. They noted that the scheme addresses long-standing concerns around gratuity and retirement benefits.
Similarly, stakeholders in the pension sector, including the Nigeria Union of Pensioners and Pension Fund Administrators, praised the reform, calling for sustained transparency in its implementation.
A total of 111 retirees benefited in the first phase of the disbursement, with payments calculated based on agreed rates applied to their Total Annual Emoluments.
The government also listed several interventions in the pension sector, including ₦26.35 billion paid to offset outstanding gratuities, ₦5.89 billion remitted as arrears of contributory pensions and returns, ₦500 million paid as death benefits, and ₦3.19 billion in pension remittances as of January 2026.
The introduction of the Additional Pension Benefit followed consultations with labour unions, pension administrators, and other stakeholders after the full implementation of the contributory pension scheme in July 2025.
Officials said the initiative would serve as a sustainable solution to address gaps in the pension system while ensuring retirees enjoy better financial security after years of service.
