The Ogun State Government has announced the clearance of pension and gratuity arrears owed to workers who retired between 2012 and 2020, reaffirming its commitment to improving the welfare of retirees and strengthening confidence in public sector administration.
The Economic Adviser and Commissioner for Finance, Dapo Okubadejo, disclosed this during a media parley organised by the Ogun State Ministry of Budget and Planning, where key officials highlighted the administration’s fiscal performance and ongoing reforms. The development comes amid growing concerns nationwide over pension liabilities and the financial sustainability of retirement benefit schemes at the state level.
Akahi News gathered that the arrears were largely linked to obligations under the Defined Benefits Scheme inherited by the present administration, under which retirees receive monthly pension payments.
Addressing Long-Standing Pension Liabilities
Okubadejo explained that the current administration has maintained regular pension payments since assuming office, noting that the challenge faced by the government was primarily the backlog accumulated before the present leadership came into power.
According to him, pension payments have continued without interruption, while efforts have focused on clearing inherited liabilities in a structured and sustainable manner. He stated that annual pension payments rose significantly from ₦6.7 billion in 2019 to ₦20 billion in 2025, with projections suggesting the figure could reach ₦40 billion by 2029 as the number of retirees increases and benefit adjustments take effect.
Akahi News learnt that the state has so far paid ₦23.3 billion in gratuities covering retirees between 2012 and 2020, in addition to ₦32.8 billion in outstanding gratuities for local government retirees inherited by the administration.
Growing Pension Obligations and Fiscal Responsibility
Figures presented during the briefing showed that between 2019 and July 2, 2025, the state disbursed ₦93.26 billion in pensions under the Defined Benefits Scheme and ₦94.78 billion to local government pensioners.
Observers noted that pension obligations have become a major component of public expenditure across many states, making consistent payment a key indicator of fiscal discipline and governance stability. Analysts believe that regular pension payments not only support retirees but also help maintain trust among serving civil servants who look forward to secure retirement benefits.
The commissioner assured that the remaining backlog would be cleared gradually as Internally Generated Revenue continues to improve. He added that more than 300 workers who retired in July 2025 are currently receiving six-month palliatives pending the completion of their pension documentation.
Introduction of Additional Pension Benefits
Another major highlight of the briefing was the introduction of the Additional Pension Benefits scheme, described by officials as an innovative approach to strengthening retirement welfare. The government indicated that amendments to the state’s pension law would be pursued to formally integrate the scheme into the legal framework guiding pension administration.
Akahi News gathered that the initiative is expected to enhance financial security for retirees while aligning the state’s pension system with evolving economic realities and rising living costs.
Budget Expansion and Economic Growth Projections
On the broader fiscal outlook, the Commissioner for Budget and Planning, Olaolu Olabimtan, noted that the 2026 budget increased from ₦1.054 trillion in 2025 to ₦1.668 trillion, reflecting what officials described as improved fiscal reforms and stronger revenue mobilisation.
According to government figures, Ogun State’s economy expanded from ₦3.5 trillion in 2019 to ₦18.96 trillion in 2026, while Internally Generated Revenue grew from ₦50 billion in 2019 to ₦240 billion in 2025, with projections of ₦512 billion for the current year.
Other commissioners also highlighted achievements across key sectors, including road construction, healthcare funding, rail extension plans, education support initiatives, and expanded housing projects, which officials said were aimed at sustaining economic growth and improving living standards across the state.
The clearance of pension and gratuity arrears for retirees between 2012 and 2020 represents a significant step in addressing long-standing welfare concerns in Ogun State. While pension liabilities remain a challenge for many governments, officials insist that ongoing fiscal reforms and revenue growth will support the gradual elimination of outstanding obligations.
Akahi News will continue to monitor developments surrounding pension reforms and fiscal management as the state advances efforts to maintain financial stability while meeting its responsibilities to retirees.
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By Joseph Iyaji | Akahi News
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