Home Latest News 26 states withhold implementation of Pension Scheme

26 states withhold implementation of Pension Scheme

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Only 10 out of the 36 states of the federation are implementing the contributory pension scheme (CPS) designed to guarantee availability and prompt delivery of pension entitlement of workers upon retirement.

Also over N60 billion cases of non-remittances of contributions by some state governments have been reported and where the funds went into are still unknown as some of the affected states are still investigating the alleged non-remittances.

Findings shows that the complying states as at June 2015; are Lagos, Osun, Ogun, Ekiti, Kaduna, Zamfara, Niger, Delta, Rivers and Jigawa states.
Vanguard investigations however show that 14 other states have enacted the enabling law which is the first stage in the process of implementation but they are yet to take further steps to actualise the dreams of their workers. These states are Bayelsa, Edo, Kano, Kebbi, Kogi, Sokoto, Oyo, Imo, Taraba, Ondo, Anambra, Enugu, Adamawa and Gombe states.

Further breakdawn of the CPS implementation statistics at the states shows that the states behind in the implementation are still putting together the pension bill. They are Abia, Bauchi, Benue, Borno, Cross River, Ebonyi, Katsina, Kwara, Plateau, Yobe and Akwa Ibom states 10 years after the scheme took off.

The implication of the above statistics is that workers in the 26 states that are yet to commence implementation would have difficult time after retirement as many who have retired before now under the old pension scheme died without collecting their pensions.

Many reports even show deaths of several retired ex-civil servants while on queue in open fields to collect just a portion of their pension which may have been outstanding for several years, a development that had prompted the creation of the new pension scheme that guarantees prompt payment.

Prior to the enactment of the Pension Reform Act 2004, pension schemes in Nigeria had been bedevilled by many problems. The Public Service operated an unfunded Defined Benefits Scheme (DBS) and the payment of retirement benefits were budgeted annually. The annual budgetary allocation for pension was often one of the most vulnerable items in budget implementation in the light of resource constraints.

In many cases, even where budgetary provisions were made, inadequate and untimely release of funds resulted in delays and accumulation of arrears of payment of pension rights. It was obvious therefore that the DBS could not be sustained.

The Pension Reform Act 2004 as amended in 2014 established the National Pension Commission (PenCom) as the body to regulate, supervise and ensure the effective administration of pension matters in Nigeria.

The amended act required the employee to contribute 8.0 per cent of his/her monthly salary to the scheme while the employee contributes 10 per cent as against 7.5 per cent from both sides before the amendment. The states that have started implementation before the amendment are required to up the contributions.

Through several workshops and moral suasions PenCom had engaged all the state governments in effort to get them key into the scheme as quickly as possible to save their retiring workers from the agony of post-retirement penury.

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