CPC provides palliative as more Nigerians are thrown into the labour market

Ayo 43, a middle manager worked with a Port Harcourt based shipping company before he lost his job eight months ago, following a large scale retrenchment in his company as result of economic recession and general lull in the oil and gas industry.

After waiting for four months with no new job in sight, Ayo left Port Harcourt to join his immediate family that has been in Lagos, while he was offshore making ends meet.

Six months gone, things began to change for Ayo and his family, as they could hardly sustain their standard of living that they were used to while he was working in Port Harcourt. House rent expired and could no longer afford to pay school fees for his four childrenwho were in their senior levels in the secondary school.

Thanks to the Contributory Pension Scheme, which allows a Retirement Savings Account (RSA) holder to access 25 percent of his contribution if he loses his job and could not secure a new one after four months.

Excited Ayo, sharing his experience said “Thanks to the CPS and my employer because i didn’t know where else to run to since my wife could only provide minimal food for the family”. When Ayo approached his Pension Fund Administrator(PFA), it was like a dream because he was able to get 25 percent of his RSA, which enabled him to pay his house rent, paid children’s school fees and also supported his wife’s food stuff shop that was almost empty.

There are many Ayo’s out there that have benefited from this, and this highlights why there is need to deepen penetration and enforce remittance pension contributions, so that in the event of job loss employees will have something to fall back on, at least in the short run.

Third quarter 2016 report of the National Pension Commission (PenCom) shows that approval was granted for payment of about N4.00 billion to 12,464 RSA holders under the age of 50 years who were disengaged from work and were unable to secure another job within 4 months of disengagement.

The report further shows that the private sector accounted for 95.43 percent (173,578) of the disengaged RSA holders, while the public sector accounted for 4.57 (8,305) as at the reporting period.

Meanwhile, according to the National Bureau of Statistics (NBS), unemployment rate in Nigeria rose from 13.9 per cent in the third quarter of 2016 to 14.2 per cent in the fourth quarter of 2016.

The report said that population of unemployed people in Nigeria rose from 27.12 million in 3rd quarter to 28.58 million in the fourth quarter, bringing thenumber of unemployed labour force to351,015 persons.

The bureau said that keeping with the recent trend in the labour market, unemployment and underemployment continued to be highest for persons aged between ages of 15 to 34 which represent the youth population in the country.

What the above statistics shows is that many more Nigerians would fall back to the CPS to survive going by the growing level of unemployment and job losses in the country, pending whengovernment is able to fix the economy.

Therefore the CPS would continue to play a critical role in providing this palliative, and that is why effort must be made by all stakeholders to not only sustain existing schemes but ensure that more Nigerians are brought under the scheme for more protection not only in retirement, but at critical times like this.

Section 16(1) of the Pension Reform Act 2014 says that an employee shall not be entitled to make any withdrawal from his retirement savings account opened under section 11(1) of this section before attaining the age of 50 years. While 16(5) in other words, say’s notwithstanding the above, any employee who disengages or is disengaged from employment before the age of 50 years and is unable to secure another employment within four months of such disengagement may make withdrawal from his retirement savings account in accordance with the provision of section 7(2) and 3 of this Act.

The Pension Reform Act 2014 provides that, “there shall be establisheduniform set of rules, regulations and standards for the administration and payments of retirement benefits for the public service of the Federation, the Public Service of the Federal Capital Territory, the Public Service of the State Government, the Public Service of the Local Government Councils and the private Sector.

The objectives of CPS is to ensure that every person who worked in either the public Service of the Federation, Federal Capital Territory, States and Local government or the Private Sector receives his retirement benefits as and when due ; and to assist improvident individuals by ensuring that they save in order to cater for their livelihood during old age.

The provisions of this Act shall apply to any employment in the public service of the Federation, the public Service of the Federal Capital Territory, the Public Service of the state, the public service of the local governments and the private sector.

In the case of the Private Sector, the scheme shall apply to employees who are in the employment of an organization in which there are 3 or more employees.

Notwithstanding the provision of subsection (2) of this section, employee of organization with less than three employees as well as self-employed persons shall be entitled to participate under the scheme in accordance with guidelines issued by the National Pension Commission.