State’s slow compliance to pension reform worsening social protection for workers
Figures from the National Pension Commission, regulator for the pension industry shows that out of the 36 States of the Federation only four have fully complied with provisions of the Pension Reform Act 2014.
It shows that four states including Lagos, Niger, Rivers and Osun have fully complied, contributing to their employees Retirement Savings Account (RSA); payment of accrued rights and provision of group life insurance as provided in the Contributory Pension Scheme (CPS).
While another eight states including Anambra, Delta, Ogun, Kaduna, Zamfara, Edo, Ondo and Ekiti, have complied half way, contributing to their employees Retirement Savings Account (RSA) and payment of accrued rights, but yet to provide group life insurance.
While 17 other states, including Imo, Jigawa, Kogi, Oyo, Nasarawa, Taraba, Akwa Ibom, Kebbi, Sokoto, Benue, Kwara, Plateu, Cross River, Bayelsa, Abia, Ebonyi, and Katsina have failed to provide these key welfare programmes to their employees, enjoying luxury of their offices, and want to continue or install their representatives in 2019 against the wishes of citizens.
According to the Pension Reform Act 2014, the objective of the CPS among others is to ensure that every person who worked in either the Public Service of the Federation, Federal Capital Territory, States and Local Governments or the Private Sector receives his retirement benefits as and when due. Apart from that, it is also to assist improvident individuals by ensuring that they save in order to cater for their livelihood during old age.
Workers in some many states of the federation are being owned monthly salaries and where they are paid at all; high cost of leaving fueled by rising inflation is not allowing them save much for the future.
This development underscores why states must comply with the Pension Reform Law to be able to provide and save for their employees for retirement.
A situation where by incumbent governments fail to comply, and having borrowed so much or put their states in huge debts, and then pass pension burdens to incoming governments are inimical to the survival of employees during old age.
Longe Eguarekhide, managing director/CEO, AIICO Pension Managers Limited who commended government of States that have complied, said it takes courage, compassion and interest in citizens welfare, for a sitting governor to provide these for its employees.
While confirming that only 4 states in Nigeria are fully compliant with the CPS, he urged workers in other states to push for their rights to adequate pension arrangements.
“The savings culture thus introduced provides an autonomous pool of long-term capital that can be accessed to propel development in critical need areas. Successfully done, this can spark off a virtuous cycle of development.”
Aderonke Adedeji, president, Pension Fund Operators Association of Nigeria (PenOp) said the states are at different stages of implementation, but the good thing about it is that some progresses are being made.
Adedeji said getting the states to comply with provisions of the CPS is a long and pain staking process.
“For a lot of the states, you cannot go in and get a yes for an answer. It literally does take years to talk to the executives, labour unions, and other stakeholders.”
She said PenOp and PenCom have sometime last year formed a joint committee, that is going round the states to encourage them to comply with the pension law.
The Contributory Pension Scheme, as the name suggests, is contributory in nature, making it mandatory on employers and employees in both the public sector and private sector organisations with three or more workers to contribute 10 and 8 percent respectively of the emoluments of the employee into a Retirement Savings Account (RSA).
Apart from ensuring that every worker receives his entitlement as and when due, the other objectives of the scheme includes to assist improvident individuals by ensuring that they save in order to cater for their livelihood during old age.