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Most states breaching pension law, says Takor

By Victor Ahiuma-Young

In the last edition, Barrister Takor began this piece on public sector pension. In this concluding part, he said among others, that most states are breaching the country’s pension law.

A cross section of pensioners

Nigeria, in 2004 carried out a comprehensive reform of its pension schemes, with the promulgation of the Pension Reform Act 2004, which was later replaced with the Pension Reform Act 2014. The main objective of the pension reform, which introduced the Contributory Pension Scheme, CPS, is to ensure that every person that worked in either the public or private sector in Nigeria receives his or her retirement benefits as and when due.

The CPS is running smoothly in the private sector, as workers who retire from the sector are paid as and when they retire.

The challenge of the scheme is in the public sector (federal and states), where workers for some years now are not being paid as and when they retired. The crisis facing Federal Government retirees, emanate from the fact that the Federal Government has not been funding the Retirement Benefits Bond Redemption Fund Account in the Central Bank of Nigeria as she ought to.

The bulk of retirement benefits of employees who were in employment before the reform in 2004, is in the accrued rights, i.e. benefits from date of their first employment, up to June 2004, the date of the commencement of the CPS.

Issues militating against employees

The second issue militating against employees in the federal public service is that of delays in the remittance of contributions into the Retirement Savings Accounts, RSAs of employees and implementing the new rates of contribution of 12 per cent and 8 per cent for the employer and employee respectively, which came into effect from June 2014. These are acts of non-compliance with the provisions of the Pension Reform Act 2014.

States and Local government workers and pensioners are worse off than their federal counterparts. Fourteen years after coming into effect of the Pension Reform Act 2004, which repealed the Pension Act 1990 that was of universal application in the whole Public Sector in the country and the introduction of the CPS, some states have failed to enact laws to protect the pension rights of their workers.

As at the last count, only about 10 state governments have either enacted pension laws or are at various stages of enacting pension laws for their employees. More disturbing is the fact that even those that have enacted their own pension laws, thereby keying into the CPS, operate the Schemes in default of their own laws.

Is anyone therefore surprised that most state governments are owning their workers pensions for upwards of two to three years, while those that pay, pay what they like not based on any law. Lagos, Kaduna, Edo and a few other states must be singled out for commendation for keying into and implementation of the Contributory Pension Scheme. Without any fear of contradiction, Lagos State stands out as the face of the CPS even above the Federal Government.

Governors obligations to workers of their states are two-fold, first as citizens and second, as employees of states and local governments’ public service. The first obligation arises from the series of duties that a government has pledged to perform for individuals in the state, while as workers, they are entitled to economic and social rights, derived from their contract of employment. These are the right to work; the right to just conditions of work; right to fair remunerations; the right to an adequate standard of living; the right to social security etc. Pension is a principal element of any social security system.

If the President has met the Federal Government’s obligations to workers and pensioners, he should be commended and supported if seeking re-election.

However, if he has failed in this area, and is seeking re-election, he has to enter into an understanding with the labour movement on how he intends to correct the wrongs of the past or the movement decides on the next move.

In the event he is not re-elected, the movement should champion the campaign that will stop him from collecting pension or any form of retirement benefits from the coffers of the Federal Government. The same should apply to state governors.

Consequently, any governor who is currently drawing pension from a state where issues of workers’ pension has not been adequately addressed should be stopped from receiving pension or any terminal benefit.

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