Workers and retirees remain endangered owing to the non-compliance by state governments with pension law. Omobola Tolu-Kusimo reports.
Two years after the Ogun State Governor, Dr. Dapo Abiodun, came to office, the future of the state workers remains hopeless as the government has no pension plan for them.
The state, which has been deducting 7.5 per cent employer and 7.5 per cent employee pension contributions under the Contributory Pension Scheme (CPS), during the tenure of the former Governor Ibikunle Amosun, stopped remitting same since 2015.
This was the status of implementation of the Contributory Pension Scheme (CPS) in states for all zones as at March, this year.
The state has failed to remit pension contributions into the Retirement Savings Accounts (RSAs) of the state and local government councils’ employees.
Similarly, the state has arrears of accrued pension rights; yet to open retirement benefit bond redemption fund account; yet to commence funding of the accrued pension rights; and yet to institute a group life insurance policy.
The only thing it has done was the enactment of a law on the CPS in 2008, and amended in 2013 to extend its transition period to 2025.
The state government established two Pension Bureaux – state and local government; registered employees with Pension Fund Administrators (PFAs) and began deductions from workers’ salary without remitting same to the PFAs.
The implication is that workers and retirees of the states will most likely not have pension benefits to fall back on after retirement.
Oyo State’s case can be termed as the worst in the Southwest Zone.
The state under the administration of Christopher Alao-Akala enacted a law on the CPS in 2010.
During the administration of the late Governor Abiola Ajimobi, the state pension liability soared.
According to PenCom, the state in 2018 forwarded a Bill to amend the Principal Law and the commission had since communicated its observations on the review of the draft amendments to the state.
The commission said the state under under the current governor, Seyi Makinde was yet to commence remittance of pension contributions; yet to conduct an actuarial valuation; yet to open a Retirement Benefits Bond Redemption Fund Account; yet to establish a Pension Bureau; yet to commence funding of the accrued pension rights; yet to register its employees with PFAs and yet to institute a Group Life Insurance Policy.
In the case of Osun State, the backlog of unremitted pension contributions and arrears of accrued pension rights is humongous.
The report further showed that the state is not funding accrued pension rights adequately.
However, the state has recorded some achievements as it enacted a law on the CPS in 2008, established two Pension Bureaux – state & local governments; and registered its employees with two PFAs.
The state remitted 7.5 per cent employer and 7.5 per cent employee pension contributions up to last December for the state employees, despite backlog of pension contributions from May 2019 to last July.
Also, the state has conducted an actuarial valuation, has valid Group Life Insurance Policy and has opened Retirement Benefits Bond Redemption Fund Account with the Central Bank of Nigeria (CBN).
Ekiti State has also enacted a law on the CPS, carried out an actuarial valuation, amended the pension law in 2017; opened a Retirement Benefits Bond Redemption Fund Account with the CBN; established a Pension Bureau; registered its Employees with PFAs; remitted 10 per cent employer and eight per cent employee pension contributions up to last September.
But the state is yet to institute a Group Life Insurance Policy and commence funding of the accrued pension rights.
Meanwhile, Lagos State has continued to blaze the trail among Southwest states and others in the Federation.
It has implemented the law on pension contribution increase by contributing its 10 per cent portion of the total increase.
The only area of concern for the state is that it has arrears of accrued pension rights.
The state was the first to enact a law on CPS in 2007; conducted an actuarial valuation, amended some sections of the Principal Law in 2019; funding the employees’ accrued pension rights but has arrears.
It has established Pension Bureau; recently opened Retirement Benefits Bond Redemption Fund Account with two PFAs for the state and local governments; registered employees with PFAs; remitting 10 per cent employer and eight per cent employee contributions; and has valid Group Life Insurance Policy for its employees.
Ondo State is next to Lagos in terms of PenCom stated in the report that the state enacted a Law on the CPS in 2014, established a Pension Bureau; registered its employees with PFAs; remitting 10 per cent employer and eight employee pension contributions up to January 2021; has valid Group Life Insurance Policy.
But no actuarial valuation has been carried out as employees covered under the CPS in the state have no accrued pension rights.
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