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28 states yet to fully embrace contributory pension scheme

…Lagos pays N21billion

By Olasunkanmi Akoni & Monsuru Olowoopejo

Reports emanating  from the Pension industry in Nigeria has revealed that 28 out of the 36 states are yet to fully embrace the contributory pension scheme, CPS, introduced over nine years ago following the Pension Reform Act, PRA, 2004.

Nigeria-mapSimilarly, only Six out of 21 state governments that have enacted their laws on the CPS have remitted N26.17billion into the Retirement Savings Accounts, RSAs of their workers under the scheme.

These were some of the revelations at the recent pre-retirement seminar organised Lagos State Pension Commission, LASPEC, in collaboration with the state’s approved Pension Fund Administrators, PFAs, and insurance companies, for workers who will be retiring from the public service between January and June, 2014.

No fewer than 1,200 prospective retirees attended the seminar. There  already,  RSAs of 3,900 retirees, under the CPS with N21, 492,107,232.77 as at the end of December 2013.

Speaking at the event, Director-General, LASPEC, Mr. Rotimi Adekunle Hussain, said the seminar, was designed to broaden the knowledge of the would-be retirees on how best to prepare for their retirement and access their retirement benefits under the CPS.

According to him, “the seminar organized in collaboration with the State’s approved Pension Fund Administrators (PFAs) and Insurance Companies, is designed to further broaden the knowledge of the would-be retirees on how best to prepare for their retirement and access their retirement benefits under the Contributory Pension Scheme (CPS).”

“The Pre-Retirement seminar program is aimed at assisting the prospective retirees to adequately prepare for their physical, emotional and financial well-being in retirement as well as afford them the benefit of being in a better position and frame of mind to build a comfortable and rewarding life in retirement”.

He noted that the seminar would among other benefits, explain the procedures for processing the end of service benefits; how to monitor and ensure that a  retirement savings account is up to date with payment of the statutory monthly contributions and also expatiate on the two exit options of programmed withdrawal provided by the PFAs and the annuity for life option provided by the insurance companies.

The Director-General explained that other areas covered include, “healthy living in retirement and making good investment decisions”, stressing that “it will also assist the prospective retirees to adequately prepare for their physical, emotional and financial well-being in retirement as well as put them in a better position and frame of mind to build a comfortable and rewarding life in retirement.”

The Director-General expressed his Commission’s appreciation to  Governor Fashola for the achievements recorded so far made in the administration of the Contributory Pension Scheme in the state.

According to Hussein, “Reports emanating from the industry recently, show that 28 states in the country are yet to fully subscribe to the Contributory Pension Scheme while only six out of 21 state governments that had enacted their laws have remitted N26.17billion into the Retirement Savings Accounts of their workers registered under the scheme.

Statistics from the National Pension Commission (PenCom) also shows that Lagos State has continued to remit the highest figure”.

An  earlier report from  PenCom, indicated no state in the South-East had complied with PRA 2004, only Lagos State fully complied with the act in the South-West.  Kano and three other states in the North-West zone of the country are yet to key-in into scheme.

Transferred pension funds

The other states are Kebbi, Kastina and Sokoto. Though Kano state enacted its law on the CPS in 2006,  it is yet to appoint Pension Fund Administrators, PFAs, and has not transferred pension funds for management, while Kastina state drafted a bill on the CPS which was reviewed by the National Pension Commission, PenCom, and found to be largely in conformity with the PRA.  It has however not translated the bill into law

Although Zamfara state adopted the CPS, enacted its law in 2005 and registered 63,254 employees and remitted N534.4 million as employee portion of the contributions as at November, 2013, it is yet to commence remittance of  the employer’s contribution  from the commencement of the scheme.

While speaking at the  official opening of the commission’s North-West zonal office in Kano, Acting Director-General of PenCom,  Mrs. Chinelo Anohu-Amazu,  explained that whereas the Pension Fund Administrators, PFAs, manage the funds,  they have  no access to same as custody was vested in the Pension Fund Custodians, PFCs, and the Commission ensured both parties adhere strictly to regulations governing the funds.

 

 


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