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Recommendation to increase employer, employee contribution is for retiree benefit

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The recommendation in the Pension Reform Bill that employer and employee contributions in the Contributory Pension Scheme, CPS, be raised from a total of 15 per cent to 20 per cent is aimed at making workers even better off on retirement.

Chief Executive Officer of Premium Pension Limited, Mr. Wilson Ideva who made this assertion, noted that there is no doubt that the Contributory Pension Scheme has already proved to be the way out of the gridlock the old system ran into more than ten years ago.

Ideva also said that the Pension Reform Bill already in advanced stages of legislative processing seeks among other things to enhance the enforcement responsibilities of the regulatory institution, ensure further airtight protection of pension funds and unpack the possibilities of creatively and professionally applying pension funds for national development.

According to him, the bill also seeks to expand the dragnet of the scheme to include the informal sector, adding “It also seeks the establishment of Pension Transition Arrangement Departments (PTADs) charged with the responsibility of ensuring the seamless remittance of benefits under the Defined Benefits Scheme.

It should be noted that it is under the management of defined benefits that reports of corrupt and untoward practices have emanated from in recent times. The point being made here is that these reports have nothing to do with the contributory pension scheme.

The law establishing the industry makes pension funds tamperproof and mechanisms are firmly in place to exorcise the specter of unethical temperament in all its ramifications and guise in the industry.”

Ideva said that what is required now is total support for the scheme, fine-tuning of the establishing statutory foundations of the industry and consolidation of the gains.

He said that the contributory pension industry today in the country has scheme assets of more than N3.7 trillion by the end of last year and a membership of almost six million, adding that the numbers and figures are still growing by leaps and bounds.

The current pension regime in the country, according to Ideva, is such that the workers take ownership of their contributions while the relevant government institution superintends.

“It is now a system in which the responsibility of contribution lies with both the employer and the employee. It is now a system in which the retiree decides within the ambit of the law establishing the industry when and how he/she should be paid.

The contributory pension scheme has no doubt eroded the numerous bottlenecks associated with the previous pension system in the country and rekindled the hope and confidence of workers and retirees alike in the Nigerian System,” Ideva said.

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