The group described the proposed building project as immoral, unfair and unconstitutional.
The Edo State House of Assembly had amended the "2007 Pension Rights of the Governor and Deputy Governor Law" to make provision for the project.
The amendment, which awaits the approval of Governor Godwin Obaseki, stipulates that the state builds a house worth N200 million for the governor and another worth N100m for his deputy as part of their retirement package.
It also provides that the buildings could be sited in any location of their choice.
The Executive Director of SERAP, Mr Adetokunbo Mumuni, on Thursday, November 17, said the funds should be spent to clear the backlog of pension arrears spanning between seven and 45 months.
He said: "At a time, the state government can’t even pay its pensioners and salaries of workers the amendment by the State House of Assembly is immoral, unfair, unconstitutional and unreasonable.
"The amendment is also a rip-off on a massive scale. Governor Obaseki must reject this grotesque bill, if he wants to fulfil his election promises and lift state pensioners out of poverty.
"This so-called proposed legislation means pensioners and workers will have to fund the massive and unjust pensions for Oshiomhole, his deputy and others that will come after them."
Mumuni said that many retirees whose pensions have not been paid have been evicted from their apartments due to inability to pay rents.
He added that SERAP is aware that the state government is not the only state passing such horrible pension laws to provide outrageous retirement benefits to former governors and deputy governors.
"SERAP is finalising a comprehensive legal strategy to challenge these unjust laws, to name and shame those who continue to benefit from such laws.
"Nigerians should not be made to subsidise these bloated pensions and clearly undeserved bonus.
"Approving the amendment by the House of Assembly will amount to a fundamental breach of the governor’s constitutional oath declaration to serve the interest of justice, common good, transparency and accountability."
Mumuni said SERAP is appalled by this "apparently unfair and discriminatory" law.