Continued from January 9, 2023 edition.
ON January 9, the first part of this piece on the Bayelsa State new pension law tagged "Contributory Pension Scheme Law 2022", was published. In continuation of the piece, among others, you will read about the faith of dismissed enrollees or contributors and others.
"A suitably qualified physician or properly constituted Medical Board under subsection (2) of this section may, at the request of the employee, review the fitness of the employee and where the Medical Board certifies that he is now mentally and physically capable of carrying out the functions of his office, he may re-enter the Scheme upon securing another employment.
"For the purpose of subsection (1) of this section, the authentic age of entering the service shall be submitted by every employee upon entering the service or taking up the employment."
Dismissal from service
Where an employee who has contributed to the scheme is dismissed from the service, the law states that he would be entitled to the total contributions to the scheme due him before the date of dismissal.
Death of an employee
It also states that when an employee dies, his entitlements under the life insurance policy maintained under section 14 of the law would be paid to an underwriter to named beneficiary in line with Section 57 of the Insurance Act.
"Upon the receipt of a valid Will admitted to probate or a letter of administration confirming the beneficiaries under the estate of the deceased employee, the administrator shall, with the approval of the Board, release the amount standing in the Retirement Savings Account of the deceased to the personal representative of the deceased or to any other person as may be directed by a court of competent jurisdiction, in accordance with the terms of the Will or the personal law of the deceased employee, as the case may be," the law added.
Retirement benefits exempted from tax
In accordance with section 10 Subsection (3) of the Pension Reform Act 2014, any amount payable as retirement benefit under the law would not be taxable.
Notwithstanding the provisions of Section 1 Subsection (2) of this section, any income earned on voluntary contributions made under Section 15 Subsection (1) of this law shall be subject to tax at the point of.
Exemption from the scheme
The Law also spelt out that notwithstanding the provisions of section 1 subsection (2), any employee employed before 1st January 2012 would be exempted from the scheme.
The provisions of the law does not apply to any person holding judicial office in the state as defined by section 318 of the state constitution of the federal republic of Nigeria, 1999 (as amended) and employees entitled to retirement benefits under any pension scheme existing before the commencement of the new law.
"For the avoidance of doubt, the provisions of Section 291 subsection (3) of the constitution of the federal republic of Nigeria (as amended) shall continue to apply to the payment of pension and other retirement benefits to judicial office holders in the state," it stated.
Rate of Contribution
It states that in the case of those listed in the Third Schedule Part I and III; the employer would contribute an amount equal to 10 per cent of their consolidated monthly basic salary while the employee would contribute an amount not less than 8 per cent of their consolidated monthly salary.
In the case of those listed in the Third Schedule Part II and IV, the employer would contribute an amount equal to 15 per cent of their monthly gross salary while the employee would contribute 10 per cent of their monthly gross salary.
Group Life insurance
In addition to the rate specified in Section 13 of the law, the employer is to maintain a Group Life insurance Policy in favour of each employee for a minimum of three times the total emolument of the employee and premium would be paid not later than the date of commencement of the cover.
Establishment of State, Local Government Pension Boards
Part II of the Law, read: "there is established for the employees of the State a board for the state service and a board for the Local Government Service to be known respectively as "State Government Pension Board" and "Local Government Pension Board, both to be located in the office of the Governor. Each board shall be a body corporate with perpetual succession and a common seal; sue and be sued in its corporate name; and acquire, hold or dispose of any moveable or immoveable property for the purpose of its functions under this law."
The objectives of the boards, according to the law, include among others: to regulate, supervise and ensure the effective administration of pension matters in the State and Local Government Service; operate in line with the rules, regulations and directives made by the commission; and with regards to their respective services render on monthly basis, returns and comprehensive list of pensionable staff, existing pensioners, deceased pensioners and their next of kin to the government and the Public Account Committee of the House.
Composition of the State Pension Board
The law stipulates that the State Pension Board shall consist of- a part time chairman, who must be a person of unquestionable integrity with requisite qualification and experience.
Also, an executive secretary to serve as the chief executive officer saddled with the day to day administration of the board; four full time directors, Clerk of the House, the Chief Registrar of the state Judiciary, representatives of the state civil service commission, office of the Head of service, Ministry of Finance; Justice; office of the state Auditor General; office of Accountant General, Trade Union side of the Joint Employees Negotiating Council, the Nigerian union of Pensioners, state chapter; the Nigerian Labour Congress (NLC) and the Trade Union Congress (TUC).
Local Government Pension Board
This consist of a part time chairman, who must be a person of impeccable character and possess university degree with ten years cognate experience; an executive the secretary, to serve as chief executive officer responsible for the day to day administration of the board, two full time members as directors of administration/finance and pension matters as well as one representatives each as part time members drawn from the Local Government Service Commission.
Others include the Inspectorate Division of the Ministry in charge of Local Government matters; Ministry of Finance, office of the Auditor General for Local Government; the Nigeria Union of Local Government Employees, State chapter; the Nigeria Union of Pensioners, Local Government chapter; Medical and Health Workers Union.
The chairman and other members of the board other than the ex officio members are to be appointed by the governor in line with the state character requirement, subject to the confirmation of the House.
Assenting to the bill, the governor assured that the Contributory Pension Law would put an end to the long delay and harrowing experience retirees go through before receiving their gratuities and other entitlements.
Diri noted that the pension scheme had to be backed by law because of its importance, which he noted would outlive his administration.
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He noted that through the contributory and collaborative approach, the scheme provides that the employer shall contribute 10 per cent of their consolidated monthly salaries while the employee shall contribute 8 per cent of the consolidated monthly salary as provided by the third schedule of the law.
He assured workers that government would ensure that proper machinery was put in place to engage only reputable pension fund administrators to manage the funds in accordance with pension regulations.
"Upon assumption of office, we discovered that some of our elder statesmen that had served our state meritoriously over the period had died without collecting their gratuity. Most of them have been owed in arrears to the tune of billions of naira.
"l sat with my team to fashion out a way to pay off these elder statesmen. What we are doing is a policy of government and we thought it needed to be backed by law. That was why we sent an Executive Bill to the House of Assembly to cater for our retirees," he said.
The governor equally assured that the over N28billion arrears would be paid off within the first tenure of his administration, saying "When we assumed office (in February 2020), a minimum of N200 million monthly was made available for the payment of gratuities and we have been doing that faithfully. And in some months, we increased it to N500 million.
"Till date, an average of N862.6 million has been expended monthly on pension issues. Also, N7.58b has been paid as gratuity and death benefits from February 2020 till date.
"However, in spite of these payments made, the huge liability of over N28b for outstanding gratuity and death benefits from 2007 till date still stands. We will ensure that the over N28billion owed retirees is paid off within my first term in office."
