Thirty-one states are yet to get their acts together by complying with the Contributory Pension Scheme (CPS), thereby putting the future of the workers of these states in disarray, writes Omobola Tolu-Kusimo.
The pension administration of 31 states out of the 36 states of the federation is poor and in disarray, according to a report on state compliance with Pension Reform Act (PRA) 2004 as repealed by PRA 2014, by the second quarter (Q2) of the year.
The Act established the Contributory Pension Scheme (CPS).
Of the 31 states with pension challenges, five states, including Rivers, Niger, Ogun, and Yobe, have the most complicated pension problems.
The other states are Abia, Adamawa and Akwa Ibom, Bauchi, Bayelsa, Benue, Borno, Cross River, Ebonyi, Enugu, Gombe, Imo, Katsina, Kogi, Kwara, Nasarawa, Oyo, Plateau, Sokoto, Taraba and Yobe.
These states are riddled with pension challenges arising from maladministration of government for many years, leaving retirees and workers troubled.
The 25 states are deducting eight per cent pension contribution from their employee’s salary as mandated by the Act, but are not remitting same to their pension accounts.
While these states have not been remitting pension contributions, they are also not funding accrued rights that will enable their workers to draw pension after retirement. They did not provide Group Life Insurance cover as mandated by the PRA 2014 either.
The implication of this is that retirees of these states will most likely not have pension benefits to fall back on after retirement.
However, four states including Lagos, Federal Capital Territory (FCT), Edo, and Kaduna have made tremendous progress in pension administration. These states can be ranked as excellent in pension addiministration.
These states’ retirees will have no problem receiving their pension benefits when they retire.
A breakdown of the report showed that FCT is the most compliant as it has a regular and up-to-date remittance of pension contributions for employees of the FCT and Area Councils.
The FCT is also funding accrued pension rights and carrying out regular funding of accrued rights for FCT and FCT Area Council. To crown this sterling performance, it has a valid Group Insurance cover for its workers.
Kaduna also has regular and up- to-date remittance of pension contributions, is funding accrued pension rights consistently with five per cent of total monthly wage bill and has valid Group Life Insurance cover for its workers.
Edo, on the other hand, has regular and up-to-date remittance of pension contributions.
The state is, however, not funding accrued rights and does not have group life insurance for its workers.
Similarly, Lagos has regular and up-to-date remittance of pension contributions; funding the accrued rights of employees domiciled in an undisclosed commercial bank but has no valid Group Life Insurance policy in place.
Similarly, states where performance can be ranked as good include Anambra, Delta, Ekiti, Jigawa and Kano.
In the case of Anambra, the state has remitted the employer and employee pension contributions for local government employees up to June, last year. The state employees had their employer portion of pension contribution remitted up to December 2016 and employee portion up to May this year. The state is funding accrued pension rights for only LG employees and does not have a valid Group Life Insurance for its employees.
Delta has regular and complete remittance of pension contributions for state employees. The employer contributions for LG employees are outstanding between May 2016 and September, last year, while October last year to last January were remitted. The employee portion of the pension contributions were remitted up to date for the LG employees.
The state funded accrued pension rights of both LG and state but with huge arrears of accrued pension liabilities and does not have group life insurance for its employees.
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