Makinde Has Cleared Over ₦80bn Pension, Gratuity Liabilities, Says Oyo Commissioner

The Oyo State Government has disclosed that the administration of Governor Seyi Makinde has paid more than ₦80 billion to settle outstanding pension and gratuity liabilities inherited from previous administrations in the State.

The Commissioner for Establishments and Training, Prof. Solihu Adelabu, made this known on Monday during a sensitisation campaign on the commencement of the Contributory Pension Scheme (CPS) for enrollees in Ibadan Zones 1 and 2. The programme was held at Yejide Girls' Grammar School (Senior), Molete, Ibadan.

Prof. Adelabu said previous administrations left behind huge pension and gratuity arrears, noting that Governor Makinde has consistently prioritised the welfare of workers and retirees since assuming office.

According to him, the Governor began offsetting pension liabilities dating back to 2008 and has continued to clear the backlog while introducing reforms aimed at preventing future retirees from facing similar challenges.

He described the Contributory Pension Scheme as a sustainable and globally accepted retirement system designed to guarantee workers financial security after retirement.

The Commissioner explained that retirement is an inevitable stage in every worker's career, stressing the need for adequate preparation to ensure a comfortable and dignified life after active service.

He noted that the migration from the Defined Benefit Scheme to the Contributory Pension Scheme was introduced to address the shortcomings of the old pension system and guarantee the timely payment of retirement benefits.

Prof. Adelabu disclosed that Governor Makinde constituted a committee, chaired by former Oyo State Accountant-General, Alhaji Gafar Bello, to review the implementation of the CPS in the State. He said the committee, which comprised representatives of the Nigeria Labour Congress (NLC), Trade Union Congress (TUC) and the Nigeria Union of Local Government Employees (NULGE), worked for nearly two years to identify challenges and develop an implementation framework acceptable to all stakeholders.

He added that the National Pension Commission (PenCom) had commended Oyo State's implementation model, describing it as one of the best among the 36 States of the Federation.

The Commissioner further revealed that between 25,000 and 30,000 workers employed under Governor Makinde's administration would be enrolled in the Scheme.

He explained that while the Federal Government and many states contribute only 10 per cent each as the employers of Labour alongside employees' 10 per cent contributions, Oyo State has adopted a more favourable arrangement in which the State Government contributes 12 per cent, while employees contribute 8 per cent of their monthly salaries.

Prof. Adelabu also assured workers that Governor Makinde had approved the payment of outstanding pension contributions covering January 2025 to June 2026 for both the government's and employees' contributions.

He added that all contributors under the Scheme would enjoy life insurance coverage as an additional benefit.

In his welcome address, the Chairman of the Oyo State Post Service Board, Hon. Tunji Rafiu Adekunle, JP, described the sensitisation programme as another milestone in the State Government's commitment to building a reliable, predictable and sustainable pension system.

He explained that the Contributory Pension Scheme was designed to eliminate the challenges associated with the old Defined Benefit Scheme by ensuring regular pension contributions from both the employer and employees.

Hon. Adekunle urged workers and other stakeholders to actively support the implementation of the Scheme to ensure its long-term success.

He also assured workers that their pension contributions would be safe, explaining that the funds would be remitted directly to the respective Pension Fund Custodians (PFCs) through secure accounts regulated by the National Pension Commission.

Speaking at the event, the Zonal Director of the National Pension Commission (PenCom), Mr. Mutiu Muslim, described PenCom as the Federal Agency responsible for regulating and supervising pension administration across Nigeria.

He said the sensitisation campaign was organised to address workers' concerns and misconceptions about the Contributory Pension Scheme, recalling that when the Scheme was introduced at the Federal Level in 2004, many Nigerians had reservations about it.

According to him, the Defined Benefit Scheme previously operated across the country had become unsustainable due to the growing backlog of unpaid pensions and gratuities, resulting in prolonged hardship for retirees.

Mr. Muslim explained that the introduction of the CPS was intended to ensure that workers receive their retirement benefits promptly without depending on government allocations after retirement.

He noted that the Oyo State Government took the bold decision to implement the Scheme because the old pension system had become outdated and financially unsustainable.

He further stated that one of the main advantages of the CPS is its transparency, explaining that every worker is required to open a personal Retirement Savings Account (RSA), which remains the employee's personal asset throughout their career and cannot be tampered with, even in the event of resignation or termination of appointment.

Mr. Muslim added that under the Scheme, employees contribute 8 per cent of their monthly salaries, while the Oyo State Government contributes 12 per cent, making Oyo State the first employer in Nigeria to adopt the 12 per cent employer contribution. He said the combined 20 per cent monthly contribution provides workers with a stronger retirement savings plan and greater financial security after retirement.