The National Pension Commission (PenCom) has urged employers  to provide more benefits to their employees upon retirement.

The call is coming against the agitations by some employees and retirees in the public service to be exempted from the Contributory Pension Scheme (CPS),

Its Director-General, PenCom, Mrs. Aisha Dahir-Umar in a statement, however, said the pension contributions and Group Life policy, which the Pension Reform Act (PRA) 2014 mandates employers to provide for their employees are the barest minimum.

She stated that the PRA 2014 allows employees to go beyond the minimum to enhance the retirement benefits of their employees.

Mrs. Dahir-Umar said the implementation of the CPS had been adjudged as successful by critical stakeholders but that there were agitations from some quarters to be exempted from the scheme.

Specifically, she said the remedy for exit agitations from the CPS could be found in Section 4(4)(a) of the PRA 2014, dealing with the payment of additional benefits upon retirement.

Section 4 (4)(a) states: “Notwithstanding any of the provisions of this Act, an employer may elect for payment of additional benefits to the employee upon retirement.

She said: “Some retirees in the public service complain about low pensions. As with every human endeavour, the CPS has its share of challenges. However, these administrative challenges could be addressed within the framework of the CPS. Stakeholders must support and strengthen the CPS since the challenge of low pension can be adequately resolved within the framework provided by the scheme.

“The CPS is a sustainable pension system that has proven its capacity to achieve the ultimate goal of providing a stable, timely, predictable and adequate source of retirement income for employees in both the public and private sectors in Nigeria.

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“The CPS is based on the PRA 2014, a comprehensive well thought legislation for providing pension and retirement benefits to workers. The PRA 2014 is in line with Section 173 of the 1999 Constitution of the Federal Republic of Nigeria (as amended), which guarantees the right to pensions for all public officers.

She listed steps that employers could take to enhance employees’ pensions and retirement benefits as folows:

• Upward review of employer’s 10 per cent contribution

Low pension received by some retirees was one of the arguments for proponents of exemption from the CPS. The PRA 2014 provides a minimum contribution of 18 percent of the employee’s monthly emoluments in the ratio of 10 per cent by the employer and eight per cent by the employee. The Contribution Rate referred to above, stipulated by Section 4(1) of the PRA 2014, is only a legal minimum, which can be enhanced through a collective agreement between the employer and employees. An employer may also  bear the entire burden of contributions.Thus, if the employer’s contribution rate of 10 per cent is inadequate to give employees adequate pensions, employers may consider increasing the employer portion of the pension contribution.

• Payment of additional benefits to employees

The PRA 2014 provides that notwithstanding, the pension contributions made by employer and employee,” an employer may agree on the payment of additional benefits to the employee upon retirement”.

Accordingly, any employer may wish to provide more benefits in the form of gratuity to its employees upon retirement.

• Review of accrued pension rights/Implementation of pension increases for CPS participants

The PRA 2014 provides for review of Accrued Pension Rights for employees in the public service of the Federation by the Federal Government, from time to time, in line with the provisions of the 1999 Constitution of the Federal Republic of Nigeria (as amended). The amounts derived from such reviews are to be paid by the Federal Government and credited into the RSAs of Federal Government’s employees and retirees.

The government had released funds for settlement of pension increases to retirees under the Defined Benefits Scheme (DBS) for 2007 (15 per cent), 2010 (33 per cent) and 2019 (consequential adjustment).

Meanwhile, funds were not provided to pay pension increases for retirees under the CPS. Implementing pension increases would substantially address the issue of low pensions for all Federal Government retirees under the CPS.

• Institution of other social security benefits

Nigeria needs to institute Zero Pillar Pensions in the form of a social security benefit, which is recognised and provided for under Section 16(2)(d) of the Constitution of the Federal Republic of Nigeria 1999 (as amended).

The absence of other social security benefits in Nigeria is partly responsible for the clamour by the retirees for exemption from the CPS. A Zero Pillar Pension Scheme would go a long way to alleviate the sufferings of all Nigerians, irrespective of whether or not they had formal employment. It will also augment earnings from occupational pensions.