By Favour Nnabugwu

Sixteen State governments are yet to establish the Contributory Pension Scheme (CPS) as stipulated in the Pension Reform Act, 2014 for which remittance of pension contributions into the Retirement Saving Accounts (RSA) of their employees is yet complied with.

Chairman, Pension Fund Operators Association of Nigeria (PenOp), Mr Eguarekhide Longe at the National Pension Commission (PenCom) workshop for Journalists in Calabar yesterday, said only 20 States have so far complied with the Pension Reform Act, 2014 (PRA 2014).

He said the implementation of the PRA 2014 in the remaining states of the federation was encumbered with a number of factors including the need for Houses of Assembly to domesticate law in the new amendments provided in the Act

Longe said there is need for state governments as mandated by the PRA 2014 for state governments to implement the Contributory Pension Scheme, CPS, in their various domains to enable the workers have a good retirement

According to him, “Only 20 states have so far enacted the laws on CPS while others are struggling with one challenge or the other to domesticate the law in their states.”

“The PRA 2014 is seen as better than the old one, since it is expected to help remedy the deficiencies and inadequacies prevalent in the old one. It is a fact that the contributory pension scheme is aimed at helping people save and plan for their retirement to avoid old age poverty and dependency.”

It would be recalled that the Federal Government in 2004 enacted the Pensions Reform Act (PRA 2004) which introduced the Contributory Pension Scheme (CPS) and made it mandatory for employers and employees in both the public and private sectors to contribute towards the retirement benefits of employees. In 2014, the PRA 2004 was repealed and a new act PRA 2014 was signed into law.

The Act increased pension contribution rate from 7.5 per cent employee rate and 7.5 per cent employer rate to eight per cent employee rate and 10 per cent employer rate.

Section 4 sub section 1 of the PRA 2014 states the rate of contribution under the CPS shall be a minimum of 10 per cent by the employer and a minimum of eight per cent by the employee’s monthly emoluments.

Sub section 2 of the Act further states that the rates of contribution may upon agreement between any employer and employee be revised upwards, from time to time and the PenCom shall be notified.

Sub section 4 also states that notwithstanding any of the provisions of the bill, an employer may agree on the payment of additional benefits to the employee upon retirement or bear the full responsibility of the scheme provided that in such case, the employer’s contribution shall not be less than 20 per cent of the monthly emoluments of the employee.