By Peter Omopo
The Government has approved a new pension reform initiative aimed at enhancing retirement security for public servants, introducing an Additional Pension Benefit (APB) to complement the Contributory Pension Scheme (CPS).
The reform was unveiled at a high-level stakeholders’ meeting convened by the Commissioner for Finance and Chief Economic Adviser, , following consultations with government officials, labour unions, Pension Fund Administrators and Pension Fund Management Committees.
Addressing participants, Okubadejo said compliance with the CPS law remains mandatory and beneficial to both workers and the state. He explained that although the CPS differs from the former Defined Benefit Scheme (DBS), the administration of Governor is committed to protecting workers’ interests by addressing identified gaps in the contributory system.
According to the commissioner, the governor approved the APB in line with existing pension laws. While gratuity was a central feature of the old DBS, the new APB under the CPS is designed in a similar spirit but will be calculated using defined service-year brackets and applicable scale rates, which he said are generally more favourable to 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 reassure workers about their retirement security.
He disclosed that the APB will operate for a 10-year period as a compensatory measure for retirees affected by delays in the remittance of accrued pension obligations by previous administrations—delays that limited potential investment returns on their contributions.
The additional benefit will serve as a one-off retirement payment beginning in July 2025, aimed at cushioning the impact of past lapses and providing financial relief.
On sustainability, the commissioner noted that large lump-sum withdrawals often weaken retirees’ monthly pension income. Consequently, the state plans to seek approval from the to ensure that pension contributions are largely preserved for monthly payments, while the APB will function as a supplementary benefit.
He also urged ministries, Pension Fund Administrators and labour unions to improve service delivery, intensify public sensitisation and organise 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 and ensuring retirees have seamless access to their benefits.
Leaders of organised labour, including representatives of the and the , commended the governor for what they described as a bold and worker-focused reform.
They acknowledged longstanding concerns over the adequacy of monthly pensions under the CPS and said the introduction of the APB directly addresses those worries, pledging labour’s support for the new benefit structure.
