…Blames mischief makers for ongoing amendment of Pension Act

By Victor Ahiuma-Young

NO fewer than 200,000 private sector employers are today implementing the Contributory Pension Scheme, CPS, and have contributed 60 percent of the total pension fund assets, Centre for Pension Right Advocacy, CPRA, have said.

•A cross section of protesting military pensioners. Inset is the Executive Director of CPRA, Ivor Takor

This is even as the group contended that those behind the proposed Constitution amendment Bill No. 3 on Devolution of powers with regard to pension and the ongoing process of amendment of the Pension Reform Act 2014 are mischief makers whose ultimate goal is to kill the CPS.

In a position paper titled “Devolution of Powers Bill No. 3 And Pension Matter in the Constitutional Amendment”, Barrister Ivor Takor, Executive Director CPRA, argued among others that to segregate persons in the military service, the police force and other paramilitary and security agencies in the federation  from federal employees, under pensions in Bill No. 3, without altering the Constitutional definition of public service of the federation in section 318 of the Constitution to exclude persons in military service, police force and other paramilitary and security agencies in the federation, is nothing but mischievous.

Takor who was a Board member of the National Pension Commission, PenCom, representing Labour insisted that “there is a dire need to consolidate the gains of the CPS and avoid any legislative amendment of the Constitution and the Pension Reform Act 2014, that will bring confusion in the pension industry or may not be beneficial to employees and the self employed.

The proposed Constitution amendment Bill No. 3 on Devolution of powers with regard to pension and the ongoing process of amendment of the Pension Reform Act 2014 are unnecessary as they will bring unintended negative consequences on employees, the self employed and the economy.”

According to him: “The only rational explanation of the obvious legislative drafting mischief, is that the National Assembly intends to give constitutional backing to its ongoing attempt, aimed at killing the Contributory Pension Scheme introduced by the Pension Reform Act 2014 by attempting to exclude certain categories of officers and employees of the Public  Service of the Federation, including persons in military service, police force and other paramilitary and security agencies in the federation from the Contributory Pension Scheme, vie the private member Bills that has already gone through second readings.

It is important to state here that the Federal Government as represented by the Office of the Secretary to the Government of the Federation, including stakeholders in the pension industry, such as Employers Associations, the Nigeria Union of Pensioners, the Nigeria Labour Congress (NLC), the Trade Union Congress (TUC), operators in the industry, Civil Societies Organisations and the Nigerian Police at a Public Hearing Organised by the House of Representatives Committee on Pension, to deliberate the Private Member Bill, held on Thursday 28 September 2017 roundly condemned the Bill and asked that it be withdrawn or be thrown out  of the House of Representatives.

“Any Constitutional amendment, aimed at taking personnel of the Police force and other paramilitary out of the CPS is putting in jeopardy, the welfare of these personnel after they have retired.

This is because there won’t be a ready pool of fund to pay their retirement benefits, thereby leaving the payment of their benefits at the mercy of annual budgetary provisions and monthly allocations, based on resources available to government. One of the reasons for the provision of Retirement Savings Account and making them personal to employees is to protect pension benefits already earned by an employee from being tampered with by an employer under any guise.

The second most important issue in the Devolution of Power Bill No. 3, under pension is the attempt by the National Assembly to bring a dichotomy among workers in the private sector and how their pension will be legislated.

In the proposed amendment, under pension, in paragraph (1)(i) the Bill seeks to limit the powers of the National Assembly to make laws on pension for employees of incorporated companies regulated by federal enactment, while in paragraph (2), it seeks to give powers to make laws on pension for employees of business enterprises resident within the state and subject to state regulations to Houses of Assemblies of States.”

He noted that “This dichotomy is not necessary as employees in the Private Sector are already covered under Section 2 of the Pension Reform Act 2014 enacted by the National Assembly.

Secondly, if the amendment is being done only for the sake of devolution of power from the Central government to the States, then this particular devolution is not in the overall interest of the concern employees.

State governments have not shown any commitment in the welfare of their workers and pensioners. How then is it expected that they will be interested in the welfare of workers of private enterprises or self employed persons in the informal sector.

It is on record that about 20 states out of 36 states of the federation owe their workers and pensioners about N200 billion. 28 are still struggling to put in place pension laws for their states and local government employees, 13 years after the repeal of Pension Act 1990, which was of universal application in the public services all over the country.

Even those that have enacted pension laws for their workers, only Lagos State and  a few others are implementing the laws enacted by their Assemblies.

He recalled that Pension reform was necessitated by many problems bedeviling the public and private sectors’ pension schemes in Nigeria, declaring that many private sector organisations did not have any pension arrangement for their employees and where it existed, it was characterized by a lack of supervision and regulation.

CPRA Executive Director posited that the Federal Government decided to take measures aimed at developing a sustainable system with “the capacity to achieve the ultimate goal of providing a stable, predictable and adequate source of retirement income for employees in both the public and private sector.

This culminated in the enactment of the Pension Reform Act 2004, which introduced the mandatory Contributory Pension Scheme. The Pension Reform Act 2004 was repealed and replaced in 2014 with Pension Reform Act 2014.

“The total pension fund assets as at July 2017 was N6.5 trillion, with 7.6 million contributors. To date, about 200,000 private sector employers of labour are implementing the CPS and have contributed 60 percent of the total pension fund assets.

In order to consolidate the gains so far recorded in the orgainsed private sector, the National Pension Commission has with inputs from stakeholders, put in place guidelines for the introduction of micro pensions, targeting the informal sector (self employed) in order to secure a better life for these categories of citizens in their old age.”