•Lagos, five others in full compliance, contributory pension scheme inevitable, says PenCom
•Withholding pension immoral, says NLC, retirement now death sentence, retirees kick
Only six states and the Federal Capital Territory have fully implemented the Contributory Pension Scheme as of the end of June 2023, according to the National Pension Commission.
According to PenCom’s second quarter report for 2023, apart from the FCT, states fully implementing the CPS are Lagos, Osun, Kaduna, Ekiti, Edo, and Ondo.
No fewer than 26 states have yet to fully join the scheme.
Figures obtained on Wednesday by The PUNCH from PenCom’s second quarter report for 2023 indicated that while some states were at different levels of compliance, many were not implementing the CPS established by the National Pension Commission, but continued under the old pension scheme called Defined Benefits Scheme.
Contributory scheme
Under the CPS, the employer and the employee contribute 10 per cent and eight per cent of the workers’ monthly emolument respectively, totalling 18 per cent, which is paid into the Retirement Savings Account of the worker with the Pension Fund Administrator.
The DBS is funded by the government to provide monthly stipends for workers at retirement.
But the organised labour and pension union members in their reactions lambasted the state governments, saying while governors retired into luxury, retirees lived in penury and saw retirement as a death sentence.
The breakdown of PenCom’s report showed that Delta State was substantially implementing the CPS, and Anambra, Benue, and Kebbi were partially implementing the scheme.
Rivers, Ogun, and Niger states extended their transition period to the CPS, according to PenCom.
The states not yet implementing the CPS are Bayelsa, Kogi, Abia, Taraba, Imo, Sokoto, Ebonyi, Nasarawa, Enugu, Bauchi and Oyo.
PenCom disclosed that Jigawa was fully implementing the Contributory Defined Benefits Scheme, while Kano had partial implementation of the CDBS.
Adamawa, Gombe, and Zanfara have not started implementing the CDBS.
According to PenCom, the CDBS, which is hybrid, is contributory but the benefits are defined; every month, pension contributions are deducted from workers, and the money is pulled together and used to pay retirees.
The pension industry regulator disclosed that Plateau, Cross River, Borno, Akwa Ibom, Katsina, Yobe, and Kwara were at the bill stage of adopting the CPS.
PenCom stated, “A key objective of the Pension Reform Act is to establish a uniform set of rules, regulations, and standards for administering and paying retirement benefits for the public and private sectors at the national and sub-national levels.
“Specifically, section 2(1) of the PRA 2014 provides that the CPS applies to any employment in the public service of the federation, the Federal Capital Territory, the states, and local government as well as the private sector.
“However, by the provisions of the 1999 Constitution of the Federal Republic of Nigeria (as amended), state governments can legislate on pension matters; consequently, state governments have to domesticate the CPS within their various jurisdictions by enacting a state pension law.”
It added that the National Council of State in its meeting of August 2006, adopted the CPS for all states and local governments.
Following the scheme’s adoption, a model state pension law was developed for the state governments to adopt and modify based on their peculiarities.
“The transition from the DBS to the CPS or even the CDBS at the state and local government levels is significant in several ways and inevitable eventually, even for the states yet to do away with the DBS,” PenCom stated.
Expert tackles states
The Director of the Centre For Pension Rights Advocacy, Ivor Takor, in an interview with The PUNCH, expressed concern that 19 years into the pension reforms in Nigeria and the introduction of the CPS under the PRA 2004 which repealed Pension Act 1990 that was of universal application in the federal and state public services, there were still states in the country that had no laws in place to protect the pension rights of their civil servants.
He lamented that some of the states with pension laws for public servants were not fully implementing such laws.
Takor said, “In some states, pensions are being owned for upward of 35 months. The backlog of gratuities is almost a forgotten case, while death benefits payable to the next-of-kin of the deceased public servants are not mentioned.
“The sad and disheartening situation is that some of these states have life pension laws in favour of former governors and former deputy governors, which guarantee that these former political office holders maintain lives of luxury through generous pension and other benefits.
