Nigeria: New Pension Scheme Runs Into Brick Wall in 11 States

3 December 2019

The Contributory Pension scheme, CPS, has run into brick wall in 11 states following resistance from labour unions and state executives to the implementation of the scheme in the states.

The Head, States Operations Department, PenCom, Mr. Babatunde Phillips, disclosed at the 2019 Journalists' workshop organised by the Commission in Benin, Edo state, adding that only 25 states have enacted the pension law of the scheme.

He also noted that only nine states including FCT have commenced implementation and remittance of both employer and employee pension contributions According to the CPS , while five states have employees retiring under the CPS and drawing pensions, even as four states have enacted Laws on the Defined Benefit scheme,( DBS).

DBS is the pension scheme that was in effect in Nigeria until 2007 when it was replaced with the CPS as stipulated in the Pension Reform Act (PFA) 2004 and 2014.

Despite the 25 states announced by the commission only Lagos, Kaduna, FCT, Ondo, Edo, Anambra, Ekiti, Osun, and Delta state are actively implementing the scheme.

In his presentation at the workshop, he stated that, "Inadequate funding of the CPS in some states that had implemented the scheme had negatively impacted on the smooth implementation of the scheme.

"Resistance to the implementation of the scheme by state officials and labour unions due to poor understanding of the scheme has delayed the adoption of the scheme by states not on the scheme.

"Partial implementation where deduction and remittances of only employee portion, deduction and non/incomplete remittances among others by some states leads to wide dissatisfaction and resistance of the CPS."

He also stated that, Kwara, Plateau, Cross River, Borno, Akwa Ibom, Bauchi and Katsina, are at the bill stage of the scheme, while only nine states are remitting both employer and employee pension.

He said: "The right of states to enact their own pension laws (pension is not on Federal Government exclusive list) had been a clog in the wheel of progress as some states delay in enactment of their laws and/or enact laws at variance with PRA 2014 and CPS principles.

"Also, lack of political will by some state executive governors had been a hindrance to the implementation of the CPS by states as the decision more or less depends on the state governors, " Philip added.

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