By HENRY UMORU & JOSEPH ERUNKE

IF the amendment to the Pension Reform Act, PRA, 2004, by the Senate sails through, total contributions by both employers and employees to the Contributory Pension Scheme, CPS will be increased to 20 percent as against 15 percent currently being contributed.

Instead of the 7.5 ratio of contribution by employers and employees, the thinking of the Senate is that the employers will contribute 12% while the employees will contribute. 8%.

This was part of the high points of  the debate on a bill tagged: A bill for an Act to repeal the Pension Reform Act (No.2) 2004 and Enact the Pension Reform Act 2013 to make Provision for Contributory Pension Scheme and for Connected  Matters 2013,” sponsored by Victor Ndoma-Egba, Peoples Democratic Party, PDP, Cross River Central.

Supporting the bill, its sponsor, Senator Ndoma-Egba, said the bill, apart from securing the future of retirees, was also meant to boost the economy by improving the financial market.

According to him, the over N2.9 trillion accumulated pension funds would be used for financing infrastructural projects, job creation and other profitable national ventures, saying “the bill provides for the establishment of a pension protection fund to pool resources for funding of minimum guaranteed pensions.

This bill will strengthen the pension commission to administer, regulate, supervise and re-enforce the current pension reforms. As at Sept 2012 the estimated accumulated pension funds stood at about N2.9 Trillion. One can imagine the impact of such funds in the economy if channeled properly.”

Ndoma-Egba said when passed into law, the bill would improve payment of retirement benefits, timely remittance of pension and correct the defects in the extant bill.

He recalled that the bill was read first in the Senate on Thursday 18th April, 2013, stating that the major highlights of the Pension Reform Act, 2004, were that the scheme would be contributory and fully funded.

If passed into law, the bill would, according to its sponsor, make it mandatory for organizations in the private sector with five staff and above, to invest in pension contributions.

He explained that it was not only a safe but high yielding ventures that would increase faster than the rate of inflation and exchange rate, contending that it would ensure enhanced pension package on retirement. Further,  Egba explained that the bill was seeking to provide for full pension rights even in the event of dismissal, insisting that the bill equally provided that deposits in the retirement Savings Account could not be deducted by employers for any financial obligations.

According to him, lawmakers were living witnesses to the recent events relating to the management of pension funds in the country just as he identified non remittance of pension contributions to the Pension Fund Administrators, PFAs, by Ministries, Departments and Agencies, MDAs; delay in payment and sometimes non-payment of gratuities to pension retirees; under-payment of  retirement benefits; withdrawal of some security agencies from the scheme and corruption, misappropriation, embezzlement of the pension funds as some inadequacies of the extant law.