Lawyers seek full implementation of CPS to achieve set objectives
Despite the level of success achieved so far in the Contributory Pension Scheme (CPS), its inability at the moment to cover the larger population of Nigerian workforce both in the formal and informal sector affected by the legislation is a major challenge in realising the objectives of the scheme.
Pension Lawyers Association of Nigeria (PLAN) who made the observation said 10 years after commencement of CPS following the Pension Reform Act 2004, a larger population of Nigerian workers have not enrolled into the scheme, either as result of non cooperation of their employers or the strength of enforcement, stating that something has to be done to make the reform and efforts of government in this direction more meaningful.
Experts say out of Nigeria’s population of about 170 million people, it is estimated that 30-40 percent of this 170 million people constitutes the working class, who the pension scheme is meant to cover, who are also the productive class.
“Among the 170 million population in Nigeria, I am sure about 30-40 percent of them can be said to be productive and within this 30-40 percent working class, how many of them are covered by this pension scheme? I think it is less than 10 percent. This is how you measure whether the core objectives of this Act have been achieved,” he also argued
The Federal Government had recently completed a review of the Act, which led to the enactment of the Pension Reform Act 2014, which is an improvement on the first legislation (Pension Reform Act, 2004), as it introduced some innovations that would engender the achievement of the objectives of the scheme.
Some of these innovations include the increase in the contribution of the employers and employees from 7.5 percent flat contribution each on the part of both to ten percent for the employer and eight percent for the employer bringing to a total of 18 percent of the employees monthly emoluments as against the former 15 percent.
Secondly, the Act also provides for private sector operators, employers of labour with a minimum of three members of staff are eligible to participate in the contributory pension scheme as against the former five members of staff provided in the Pension Reform Act 2004, among several others.
Mbanugo Udenze, president of the Association, said that the decision of the government to carry out a review of the Act was a right step in the right direction.
According to him, apart from portraying Nigeria as a dynamic society, which undertakes periodic review of legislation to reflect current realities in the socio- political economy, the review also brought about some innovations in the new legislation, which were absent in the old one.
But he however said that it is one thing to have a good legislation, it is yet a different thing all together for such a legislation to adequately address the issues for which it was enacted.
Udenze, who is a senior lawyer and principal partner, Mbanugo Udenze & Co, barristers, solicitors and notary public, also said: “There is a great wall of difference between a fantastic legislation and the practical aspect of it, which is the implementation.
“Yes it is a codified law, which is good but the major thing is to see its full implementation. So in my opinion something should be done in respect of its implementation because that is only when we can say the objectives of the reforms have been achieved,” he said.
He also said: “So, the Pension Reform Act 2014, which as a matter of fact is an improvement on the 2004 Act, is still work in progress because a lot of work is needed to be done on the part of the employers in order to ensure that the core objectives are achieved.”
In measuring the success of the scheme in absolute terms, he noted that less than 10 percent of the citizens for who the pension scheme is meant to cover are yet to be covered under it. To address this obvious challenge, he said that there should be an aggressive enlightenment of the Nigerian public by the National Pension Commission (PenCom) on the need to be covered under the new pension scheme.
But he also noted that PenCom would need to further expand its structure for more coverage across the length and breadth of the Nigerian nation to be able to administer the scheme, calling on the support of the Federal Government in that regard.
In addition to this, he also called on operators in the private sector to also embrace the new scheme, which he described as the best thing to happen in the administration of pension in Nigeria.
While responding to allegations that some employers of labour, especially in the private sector do not remit deductions regularly to the employees’ pension accounts, he also charged the employees to always demand for updates on their accounts, which will keep their employers on their toes always.