Osun, 11 Other States Remit Contributory Pension Proceeds

By Ismaeel Uthman

The National Pension Commission (NPC) has confirmed that the State of Osun and 11 other states in Nigeria are the ones remitting the Contributory Pension Scheme.

According to the NPC in a press release placed in one of the national dailies on Wednesday, Osun government was remitting the employer and employees’ contributions to the CPS.

This is contrary to the rumours peddling in the state that the state government has not been remitting its own contributions and that of the workers.

In the advertorial, NPC said 15 states had enacted the CPS law but has not been remitting the contributions, while two states are remitting only the employee portion of the contributions.

It would be recalled that Governor Rauf Aregbesola had last week approved released of N1 billion for the payment of contributory pension to retired civil servants in the state.

The governor also released additional N200 million for the payment of gratuity to the pensioners.

Commenting on the NPC report, the Commissioner for Information and Strategy in the state, Mr Adelani Baderinwa on Thursday said, the report affirmed Aregbesola’s commitment to the welfare of all retired and serving public servants.

Aregbesola, according to Baderinwa, has also approved the release of another N150 million, aside the N200 million already paid out as gratuity to pensioners. The disbursement will take place shortly.

He disclosed that the total amount of gratuity to be paid by the government is N350m out of which N200m have been released and being paid, while another N150m approved to be released.

The commissioner maintained that the release of N1bn for the payment of contributory pension and N350m for gratuity payment was outside the normal monthly pension payment to the pensioners who are not on CPS.

Baderinwa said the welfare of all citizens and workers and pensioners in particular have always been the fulcrum of all decisions and policies made by Aregbesola’s administration since it came on board about seven years ago.

He said: “The administration of Aregbesola is very responsive to the plight and welfare of the workers and retired public workers in the state. The governor, naturally, does not need to be told or put pressure on before doing the right thing for the benefit of the workers.

“The NPC report is a knock for the political jobbers who are masquerading as 2011/2012 pensioners that have been fraudulently claiming that Aregbesola has not been paying pension contributions, and even diverting money meant for the payment of pensioners.

“Like we had said during their sponsored protests, those who are parading themselves as leaders of the 2011/2012 pensioners forum are apologists of the Peoples Democratic Party (PDP) being sponsored to blackmail Aregbesola’s administration.

“The 2011/2012 forum of pensioners had taken to habitually lying in pursuit of political goal than real pension matters then. The NPC report has confirmed our claim. The 2011/2012 forum of pensioners should bury their heads in shame for making unfounded allegations against Aregbesola.

“In spite of the financial challenges, Aregbesola has been faithful to the workers and retirees.”

Baderinwa urged the civil servants and members of the public to support the government in improving the Internally Generated Revenue of the state, saying that the economic resources of the state needs to be improved upon for the government to be able to carry out its constitutional duties.

FG, States Don’t Fund Workers’ Retirement Accounts  

Many workers who are retiring under the Contributory Pension Scheme are either having their pensions not paid or earning ridiculously low stipends because the government has not been effective and proficient  with the remittance of its deductions into their Retirement Savings Accounts

Four years after the Pension Reform Act was amended and employers made it a compulsion  to raise their contributions into the Retirement Savings Accounts of workers under the Contributory Pension Scheme, the Federal Government has yet to effect the change.

Since the Pension Reform Act was amended in 2014, compliance with regard to remittances of pension contributions from the public sector at both the federal and state levels have been convincing  at best

Findings revealed that direct employees of ministries, who are not under the parastals but being paid by the National Pension Commission with the funds released by the Central Bank of Nigeria, were the most affected.

Latest PenCom figures revealed that only 10 out of the 26 states that had enacted their pension reform laws had commenced remittance of funds into the RSAs of their employees.

While only a few of them have been consistent with remittances, some states have outstanding remittances dating back to two years.

Figures from the commission, however, showed that private sector remittances had been more consistent than that of the public sector.

The PRA was enacted and signed into law in 2004 to provide a contributory scheme for the payment of retirement benefits of employees in both the public and private sectors.

The Act mandated employees to open the RSAs in their names with Pension Fund Administrators of their choice and notify their employers.

In mid-2014, Section 4(1) of the PRA increased the pension contribution from a minimum of 15 per cent to a minimum of 18 per cent of the employees’ monthly emolument.

The Accountant General of the Federation was mandated under Section 12(3) of the Act to effect the deductions of the pension contributions based on the 18 per cent rate and remit same to the RSAs of the Federal Government’s employees.

While many employers in the private sector have complied, the Federal Government has failed to implement its own law.

The low pensions paid under the CPS is a reason why many groups have been agitating for a significant upward increase in pensions, or a total pull-out from the scheme.

Industry experts have said that the default by the Federal Government in implementing the 18 per cent minimum contribution has denied the workers the extra interest that should have been added to their RSAs from the investment of pension funds over the years.

The Chairman, NTA Association of Contributory Pensioners, Alhaji Gbadebo Olatokunbo, observed that the PRA 2014 sought to take care of some of the shortcomings in the 2004 version of the law.

He noted that the PRA 2014 enriched the powers and privileges of PenCom in the affairs of pensioners under the CPS, but expressed worry that the commission was not proactive in solving the plight of the pensioners.

Speaking on the issue of short-changing pensioners in the payment of entitlements, Olatokunbo said, “While some ministries, agencies and departments had discovered wrong presentations to PenCom and acknowledged the mistakes and made corrections themselves, which were later represented, PenCom refused to act on such corrections, while the contributory pensioners continue to lament the wrong entitlement payments.”

The Executive Director, Centre for Pension Right Advocacy, Ivor Takor, stated that the Federal Government had not been adequately funding accrued rights of its employees, who were in service before the commencement of the CPS, thereby causing such workers not to be paid their retirement benefits when they retired from service.

“The government has also not commenced the implementation of the increase in the rates of contribution by employers and employees as provided for in the Pension Reform Act, 2014. This increase took effect from 2014 and meant to enhance the balances in the employees’ Retirement Savings Accounts,” he said.

Takor expressed concern that under the post-reform era, federal public servants were almost back to the pre-pension reform era, where under the Defined Benefit Scheme (Pay-As-You-Go), retired federal public servants were not sure when their retirement benefits would be paid.

“Federal public servants who retired as far back as October 2015 were not paid their retirement benefits under the Contributory Pension Scheme until early 2017. The same for the next of kin of deceased federal public servants within the period. To date, federal public servants who retired in January 2017 are yet to be paid their benefits,” he added.

According to Takor, private sector employees, who are under the same scheme being regulated and supervised by PenCom, using the same Pension Fund Administrators and Custodians, are not facing the same challenge like the federal public servants.

While noting that federal public service retirees and retirees from the states, with a few exceptions, are languishing in abject poverty, he added that the government lacked the political will to do the right thing.

He said, “The irony of the whole issue is that more than 50 per cent of the pension funds generated under the Contributor Pension Scheme are invested in the Federal Government securities and the money is mostly used by the government for recurrent expenditure.

“It is used for the payment of salaries of active staff and other overhead costs. The question then is why is part of that money not being used to fund the Retirement Redemption Bond Account from where the accrued rights of those who contributed to it are redeemed?”

The Acting Director-General, National Pension Commission, Aisha Dahir-Umar, in a memorandum submitted by the commission to the Senate Committee on Establishment and Public Service at the public hearing on pension, said that it was important to address the issue of delay in the payment of pensions to retirees under the CPS.

She attributed the major cause to inadequate funding of the pension accounts by the Federal Government.

The commission sought the implementation of its recommendations presented to the committee on how to address the lingering hardships faced by Nigerian pensioners.

Kwara Retired Police Officers to Quit Contributory Pension Scheme

According to a statement signed by the Chairman of the Association of Retired Police Officers of Nigeria, Kwara State chapter, Mr. Yakubu Abdul, members of the association have expressed their desire to be excluded from the Contributory Pension Scheme.

The association which commended members of the House of Representatives for passing the bill to amend the Pension Reform Act of 2014 to exclude members of the Nigeria Police Force, Nigeria Security and Civil Defence Corps, Nigeria Customs Service and Nigeria Immigration Service from the CPS, said “The Contributory Pension Scheme we are operating now has turned out to be a mirage.

“The scheme that was supposed to be a reform and to solve the problems (emanating) from the Defined Benefit Scheme (old pension scheme) has ended up putting pensioners under the new scheme (CPS) in a disadvantaged position. As a result of this, our pensions became substantially reduced when compared with our counterparts in the old scheme.”