The Nation Newspaper

Tag: Contributory Pension Scheme (CPS)

  • PenCom: 15 states implementing CPS

    The number of states that have enacted laws on the Contributory Pension Scheme (CPS) rose in the first quarter of the year.

    This was made known in this year’s Quarterly Report of the National Pension Commission (PENCOM).

    The report showed that while 15 states have made progress in the implementation of the scheme, eight states have sent  bills for its enactment.

    A breakdown of the level of implementation of the CPS shows that Imo State is not remitting pension contributions, not funding accrued rights and has no group life insurance for its employees.

    In the same vein, Sokoto, Kogi, Bayelsa, Nasarawa, Oyo, Katsina, Akwa Ibom, Benue, Kwara, Plateau, Cross River, Abia, Ebonyi, Taraba, Bauchi, Borno, Gombe and Adamawa states are not remitting pension contributions, not funding accrued rights and has no group life insurance policy for its employees.

    Yobe State, on the other hand, is yet to commence the process of enacting a law on the scheme.

    Other states except the Federal Capital Territory (FCT) and Lagos  have no group life in place for their workers.

    The commission stated that Lagos is regular and up to date in the remittance of pension contributions and is funding the accrued rights of employees.

    Meanwhile, Jigawa State is remitting pension contributions to selected Pension Fund Administrators (PFAs), but implementing a Contributory Defined Benefits Scheme (CDBS). The state does not have group life insurance policy for its workers.

    The report read: “Ogun stopped remitting pension contributions with huge arrears of unremitted pension contributions, yet to commence funding of the accrued rights and yet to put in place Group Life Insurance policy. Kaduna has been regular and up to date remittance of pension contributions. Funding accrued pension rights consistently with five per cent of total monthly wage bill. Niger however stopped remitting pension contributions in 2015, not funding accrued rights. Delta is remitting complete and regular pension contributions for state employees, but remitting only employees’ portion for LG (local government) workers. The state funded accrued pension rights of both LG and state but with huge arrears of accrued pension liabilities.

    “Rivers is remitting only employee portion of pension contributions. The state has huge backlog of unremitted employer portion of pension contributions. The sum of N300 million was set aside with Premium Pensions in 2012 for the payment of accrued rights The FCT is regular and up to date in remittance of pension contributions for employees of the FCTA and Area Councils/LEAs. It is also funding accrued pension rights, with regular funding of accrued rights for FCTA and FCT Area Council and valid Group Life Insurance cover,” the report stated.

    The commission also inspected pension boards and bureaus.

    “The commission conducted the maiden inspection of the pension arrangements in Edo State and its agencies. The inspection was aimed at ascertaining the level of implementation of the CPS as well as the administration of the Defined Benefits Scheme (DBS) in the state. The Commission also conducted an inspection of the Pension Fund Administrator (PFA) branches operating in Edo State.

    “The inspection was to determine the extent to which staff of the PFAs were conversant with the provisions of the Edo State Contributory Pension Law and extant regulations and guidelines issued by the Commission, the level of compliance of the PFAs with the Commission’s circular on minimum requirement for opening of branches and service centers as well as the quality of services rendered to stakeholders.

    “The Commission conducted routine inspections of the FCT Pension Board and the FCT Area Council Staff Pension Board. The purpose of the inspections was to ascertain the level of implementation of the CPS as well as the administration of the DBS in the FCT and Area Councils,” according to the report.

    It said engagements with the state governments on the implementation of the CPS also continued.

    “The Commission continued its engagement with state governments on the implementation of the CPS. The Commission held series of meetings with the management and staff of Ondo State Pension Commission (OSPEC), the Committee on the Implementation of the CPS in Ondo State, the Management and Staff of the Ondo State Oil Producing Area Development Commission (OSOPADEC) as well as officials of the Ondo State Local Government Service Commission. The meeting was convened to discuss some of the challenges in the implementation of the CPS in the state.

    “The issues discussed include provision of Information Communications Technology (ICT) infrastructure, especially the deployment of appropriate applications by OSPEC, provision of Group Life Insurance Policy, capacity building for staff, non-conduct of Actuarial Valuation to determine the past service liabilities of the employees, non-creation and funding of the Retirement Benefits Bond Redemption Fund (RBBRF) Account, irregular deduction and remittance of pension contributions for employees of the state.The Commission held a meeting with the Technical Committee on Pension, Kano State. The meeting was convened to address the issue of non-remittance of pension contributions and inability of Kano State Pension Fund Trustees to pay retirement benefits as at when due,” the report stated.

  • Pension: FG, stakeholders faults bill seeking to exempt paramilitary personnel

    Pension: FG, stakeholders faults bill seeking to exempt paramilitary personnel

    The Federal government has opposed the exclusion personnel of paramilitary services from the Contributory Pension Scheme (CPS) as proposed by a bill in the House of Representatives.

    The government balked at the proposal of being responsible for the pension liabilities of personnel of anti-graft agencies and para-military services.

    For emphasis, the Federal Government has issued a White paper prohibiting all Ministries, Departments and Agencies (MDA) as well as paramilitary from pulling out of the CPS to Defined Benefit Scheme (DBS), it was revealed.

    The Speaker of the House of Representatives, Yakubu Dogara and others stakeholders Thursday at a public hearing on two pension-related bills warned  that to erode the gains of CPS that has over N6.4 trillion in its pool would attract avoidable consequences.

    One of the bill seeks to amend Pension Reform Act, 2014, to exclude/exempt personnel of various paramilitary and anti-graft agencies from CPS, while the other was  for an Act to amend the provisions of the Pension Reform Act, to reposition the contributory pension scheme for effective service delivery.

    If the exemption bill, sponsored by Oluwole Oke, who is also Chairman, House Committee on Public Procurement is passed into law, the Federal Government will take responsibility for the payment of 100 percent pension for personnel of Nigeria Police Force; Security & Civil Defence Corps; the Nigeria Customs Service; Nigeria Prisons Service; Nigeria Immigration Service; Economic & Financial Crimes Commission; Independent Corrupt Practices Commission; Nigeria Drug Law Enforcement Agency.

    In his presentation, Roy Ogor, from Office of the Secretary to Government of the Federation (OSGF), who spoke on behalf of Federal Government, noted that provisions of the exemption bill is not in the interest of a sustainable pension programme for the country.

    Saying that the bill should be discarded, Ogor opined that the National Assembly should not encourage legislations that would further compound the socio-economic challenges facing the country.

    According to him, the Federal government would prefer the lawmakers strengthen the Pension Reform Act that has provision for increase in pension contribution by employers rather than the proposed amendment which seeks to exempt paramilitary personnel.

    While he stressed that the government is only desirous of maintaining the extant arrangement, Ogor said public and private employers should be encouraged to meet their 18 percent pension obligations as provided in Pension Reform Act, 2014.

    He however complained that public and private employers are currently struggling to comply with the current contribution of 18 percent as the lingering economic recession affect both public and private employers.

    Nigerian Employers Consultative Association (NECA) advocated for introduction of ‘closed pension scheme’ for the paramilitary rather than outright exemption which he noted is detrimental to the well-being of the personnel of various paramilitary agencies.

    According to NECA, the implementation of the DBS as proposed by the bill would be jeopardized as government cannot afford to wholly fund the pension of the paramilitary personnel due to inadequate funding.

    The National Insurance Commission (NAICOM), the adviser to Federal Government on insurance matters, disclosed that the CPS has paid N180b annuity as at March 2017 thereby deepening the development of insurance in the country.

    Earlier, Speaker Dogara warned against any attempt to destroy the legacy achieved through the contributory pension scheme.

    Represented by the Chief Whip, Ado Doguwa, the Speaker said, “We are conscious of the fact that the pension industry has become a crucial sector that is playing a formidable role towards the development of the economy in terms of availability of huge investment funds of about N6.4 trillion provided by the scheme that could be deployed both in the real sector as well as in the capital market sector.

    “Furthermore, the role effective pension administration plays in the general well-being of the pensioners cannot be over-emphasised and we as a parliament will always ensure that the efforts of those that labored for the fatherland will always be appreciated through regular and timely payment of pensions and gratuities.

    “Any bill therefore that can improve both ends of the sector, that is, the pensioners’ wellbeing as well as the administration of the funds will always be favourably considered by the House.”

     

  • ‘Anambra begins contributory pension scheme in 2018’

    ‘Anambra begins contributory pension scheme in 2018’

    The Anambra State Head of Service (HoS), Mr Harry Udu, has said that the Contributory Pension Scheme (CPS) will commence in the state in 2018.

    Udu told the News Agency of Nigeria (NAN) in Awka on Monday  that efforts were being made to put the prerequisite conditions in place for effective take-off of the scheme to ensure that no retiree was stranded in the process.

    He said the composition of Contributory Pension Scheme Board (CPSB) was awaiting the nomination and confirmation of the private sector representatives.

    Udu explained that while the employee deduction for local government workers was up to date, that of the state government had not been fully implemented.

    He said only a government with the interest of people at heart could embark on the programme, considering the huge capital involved.

    “The position of CPS in the state is that the scheme commenced in 2014, the deductions started that time but there are a few things that need to be done, including composition of the board.

    “The composition of the board is prescribed in the law but there are individuals that should come from the private sector who will be confirmed by the House of Assembly upon appointment by the governor.

    “When that is done, we will have the full composition of the board.

    “The deduction from the local government system is being done religiously.

    “No problem with that but there is a gap in the state which the government is making serious effort to rectify.

    “The effective take-off will not be later than next year, and you know under the scheme, there is a three-year moratorium for those about to retire but because of the hitch, the governor decided to extend it to avoid some people being trapped,” he said.

    The HoS lauded the state workforce for justifying the government’s gesture of prompt payment of salaries, adding that all was being done to make them happy.

    He reiterated the zero tolerance of government to truancy and absenteeism, noting that the clock-in machine mechanism had helped to ensure that workers were regular at their duty post.

    “Workers get their salaries 24th of every month, just as pensioners get their pensions.

    “That is why our governor acquired the sobriquet of ‘alert governor’.

    “Labour has contributed immensely to shore up the Internally Generated Revenue of the state.

    “We have a clock-in machine which is used to check absenteeism and truancy; for areas that are not yet covered by these machines, we have occasional raids.

    “According to the civil service rule, absence without leave renders you liable for dismissal without formality,” he said.

    On the circular that no worker in Anambra will receive salary without possession of Voter’s Card, Udu said it was not meant to witch-hunt anybody but to fight voter apathy.

    He said it was a decision of the State Executive Council targeted at ensuring that those who attained 18 years recently or had not registered should register to vote.

    “Voter apathy is a serious issue here; stakeholders including civil society groups, have expressed concern with this pattern, so it is a decision of the state executive council.

    “The directive does not affect everybody but those who have attained 18 years and those who for any reason have not registered.

    “You can register and choose not to vote on the Election Day; after-all, to vote is a civic duty, but it is not meant to witch-hunt anybody.

  • Lagos retirees hail LASG on prompt pension payments

    Lagos retirees hail LASG on prompt pension payments

    Retirees in Lagos State on Tuesday in Lagos commended the state government for its commitment of paying them promptly.

    They told the News Agency of Nigeria (NAN) that the state government had consistently ensured that contributions are remitted into Retired Savings Account (RSA) since 2007, when the state subscribed to the Contributory Pension Scheme (CPS).

    The Director-General of Lagos State Pension Commission (LASPEC), Mrs Folashade Onanuga at 12th retirement benefit documentation seminar held on June 7 said the state had expended N28.5 billion on 6, 509 pensioners in the last two years.

    Adenuga said that a total of N62 billion had been paid into RSA of about 13,675 retirees since the commencement of the payment of entitlements in the CPS in 2007.

    Mr Olusesin Oluwakemi, a former staff of the Ministry of Poverty Alleviation and Woman Affairs said he was initially displeased when the Contributory Pension Scheme (CPS) was introduced.

    “Later I discovered the idea is a way to help the retirees.

    “The process of payments is now better unlike before, if you retired, you cannot sleep,“ he said.

    Oluwakemi pointed out that most retirees before 2009 could no longer afford to take care of themselves because they were owed their gratuities and pensions.

    “Those building houses and have children in universities as the retirees could not get their gratuities and if they ever did,  they will get it probably two years after retirement, “ he said.

    She noted that the scenario had changed since Gov. Raji Fashola’s administration and up till date, the state government paid promptly.

    “Once a retiree processes his or her documents on time, the gratuity will be paid on time and the monthly payments will be regular,“ he said.

    He said that challenges might surface when pensioners do not put things in place before retirement.

    “Like not upgrading RSA accounts and documentation of needed papers for processing gratuity, will make some pensioners have problems.’’

    Mrs Adeyemi Jeminat, an ex-staff of the Ministry of Lands and Survey also commended the state government for holding retirees in high esteem.

    “It is only Lagos State that holds retirement documentation seminar to ensure retirees peacefully enjoy their retirement lives.

    “I also use this opportunity to commend the D-G of LASPEC,  Mrs Onanuga on efforts of ensuring that Lagos state retirees are  enjoying their lives in retirement.

    “She achieved total government commitments to the welfare of the retirees with directives that all ministries and agencies ensure employees are promptly credited,’’ she said.

    According to her, Lagos remains the only state that fully complies with the provisions of the Pension Reform Law as it relates to contributions remittances.

    She said that pensioners in the last era were not enjoying like now, as Gov. Akinwunmi Ambode had been doing well,  especially for the Teaching Service Commission.

    Mr Olusosun Saheed, who worked with Lagos State University Teaching Hospital (LASUTH), praised Ambode on the innovations developed to facilitate gratuity and pension remittances.

    He said that the governor’s investment in the LASPEC on e-environment to ensure the commission delivered seamless service was commendable.

    “Through this, the commission has been able to introduce the Employees Retirement Evaluation System (ERES) to aid and facilitate the benefit payment system.

    “The software is to hasten the process of computing the past service benefits of retirees with minimal human intervention and zero per cent error rate,’’ he said.

    He also commended Ambode’s perfection of the electronic archiving records of finalising the Retiree Identification Card Issuance process.

  • President Buhari releases N54bn to settle pension backlog

    President Buhari releases N54bn to settle pension backlog

    The Muhammadu Buhari administration  has released N54 billion to clear part of the backlog of accrued pension rights for the years 2014, 2015 and 2016.

    The Director of Information, Ministry of Finance, Mr Salisu Danbatta said  on Wednesday that N41.5 billion has already been released to the National Pension Commission (PENCOM).

    The amount released was for onward payment to those who retired under the Contributory Pension Scheme and who were yet to be paid.

    Danbatta quoted the Minister of Finance, Mrs Kemi Adeosun as saying that  N12.5 billion,  being outstanding for January, February and March 2017, was also  released,  bringing the total to about N54 billion.

    “Despite conflicting demands for available cash, President Muhammadu Buhari has always expressed concern over the plight of workers and pensioners.

    “Consistent with this, we have released N41.5 billion which clears the arrears inherited from the previous administration relating to the period 2013-15 and underpayments in 2016.

    “This will bring relief to thousands of our elders who have served and deserve to be paid their entitlements promptly and fully,” she said.

    The minister said that the amount paid also included arrears of those who retired as far back as 2013 and had been unable to access their pension under the contributory scheme due to non-payment.

    To avoid future accumulation of pension arrears, Adeosun said that henceforth “the monthly allocation to the PENCOM based on the appropriation of 2017 will regularly be paid along with monthly salaries of Ministries, Departments and Agencies (MDAs).”

    All Federal Government workers began  the monthly Contributory Pension Scheme in 2004, in line with the Pension Reform Act.

    The money the Federal Government now owes its workers before the commencement of the act, is recognised in form of the issuance of Federal Government Retirement Benefits Bonds.

    Upon retirement of an employee, the bonds are to be liquidated and added to the balance of the retirement savings account of an employee to get the amount  he or she is entitled.

    To ensure that government settles backlog of accrued rights, Pension Fund Administrators are not allowed to grant retirees access to their retirement savings until the federal government releases the accrued rights component.

    This means that a retiree cannot access his or her Retirement Savings Account (RSA) through the Pension Funds Administrators without the accrued pension rights component.

    So for Public Service workers who migrate to the Contributory Pension Scheme (CPS) in 2004, shortly before they retired, they are entitled to two components of retirement benefit.

    That is the contributions accumulated in their RSA and their accrued right from the time they joined the service to the time they migrated to CPS.

    The federal public servants who retired since January 2016, had staged a protest at the Federal Ministry of Finance headquarters in Abuja over their unpaid pension to the tune of N200 billion.

    The retirees under the auspices of the League of Federal Service Contributory Pension Retirees led by the Coordinator, Mr Chike Ogbechie said that workers who have retired in the last 15 months were yet to receive their pension.

    In reaction to the recent release, Mr Ogbechie when contacted by the News Agency of Nigeria said that the “N54 billion will clear much of the backlog of our pension, but not all. So the struggle still continues”.

     

  • Expert advice artisans to embrace micro pension scheme

    A financial expert, Mr Mufutau Oyegunle, on Wednesday advised Nigerians in the informal sector to embrace the micro pension contributory scheme being developed by National Pension Commission (PenCom).

    Oyegunle told the News Agency of Nigeria (NAN) in Lagos that the scheme, which would begin in 2017, would enable them develop saving culture and live better at old age.

    He urged artisans such as tailors, plumbers, vulcanisers, mechanics, hairdressers and others to key into the scheme.

    The expert said that the scheme was not particularly new as it was being successfully practised in India, Kenya, Ghana and other countries.

    “Those who think they are unable to save due to low income will still find it difficult to save when they have more because saving requires discipline.
    “If you can’t save N10, you can’t save a billion.

    “If you think your fund is too small to save, you may not save when you have it increased by 10 million folds.

    “This is the fundamental principle when it comes to money. So, no amount is too small to be saved,” he said.

    Oyegunle, who is the Managing Director of LAKEG Insurance, said PenCom had targeted over 50 million workers in the informal sector for the Contributory Pension Scheme (CPS) using the Micro Pension initiative.

    “The commission expects to get at least 20 million savers in the informal sector into the scheme in the next four years,” he said

     

  • Acting CJN blames corruption for ineffective pension system

    Acting CJN blames corruption for ineffective pension system

    …PENCOM DG seeks Judiciary’s support

     

    The Acting Chief Justice of Nigeria (CJN), Justice Walter Onnoghen has attributed the ineffectiveness of the nation’s pension system to corruption and poor application of existing laws.

    He said the pension system will achieve its intended objective where players in the sector are guided by accountability and commitment to existing regulations.

    Justice Onnoghen spoke in Abuja Thursday at a two-day sensitisation workshop on the Contributory Pension Scheme (CPS) for Justices, judges and senior judicial officers, organised by the National Pension Commission (PENCOM).

    The Acting CJN said:”We owe a duty to this generation and generations yet unborn to help ensure that pensioners, who devoted their lives and strengths in the service of Nigeria, receive their pension benefits as and when due.

    “To consolidate this consciousness, we must support the Federal Government’s fight against corruption.

    “Here lies the need for objectivity and impartiality by regulatory officials, accountability by pension administrators and transparency by pension fund custodians and other stakeholders,” he said.

    Justice Onnoghen noted that some of the key challenges of the pension system include how well pension assets are managed; how well enabling laws and regulations are implemented; how well pensioner are treated, and how well the laws and regulations are fairly applied and interpreted.

    He added that the successful resolution of the identified challenges will guarantee that every person, who worked in either the public or private sector receives his retirement benefits as and when due.

    “I must caution that technicalities by lawyers and attitudes of certain employers, pension administrators and pension custodians must, in no way, hamper the good objectives of the Federal Government,” Justice Onnoghen said.

    PENCOM’s Director General, Mrs. Chinelo Ahonu-Amazu explained that the workshop was intended to familiarise participants, particularly the Justices and judges on the innovative provisions of the Pension Reform Act (PRA) 2014.

    She said better understanding of the provisions of the new pension law by judicial officers will allow for prompt and effective resolution of pension disputes.

    “As it is with all new initiatives, the implementation process often results in certain challenges, and disputes may arise due to lack of adequate understanding of responsibilities on the part of stakeholders or misconstruction of the provisions of the Act.

    “Furthermore, in the course of enforcing compliance on recalcitrant employers by the commission, some disputes emanate that are ultimately resolved in the courts.

    “Therefore, the important role of the Judiciary in ensuring that the pension reform remains on course and deepened, as enshrined in the PRA 2014 cannot be over-emphasised,” the PENCOM DG said.

    Heads of courts, at the event are – Justices Zainab Bulkachuwa (President, Court of Appeal), Ibrahim Buba (Chief Judge, Federal High Court) and Babatunde Adejumo (President, National Industrial Court) assured of their support in ensuring the realisation of the objectives of PRA 2014.

    Justice Adejumo, who noted that the support of lawyers was necessary to achieve success, suggested that PENCOM organise similar workshops for legal practitioners.