Breaking News

Non-remittance of Pension worries Labour

Kindly Share This Story:
Pensioner, Oyo

Stories by Victor Young

THE unending crisis of non-remittance of the deducted pension fund to enrolee’s Retirement Savings Account, RSA, by employers especially the private sector and state governments, was one of the issues focused on during the May Day celebration.

At the National May Day rally held at Eagle Square, Abuja, Nigeria Labour Congress, NLC, and its Trade Union Congress of Nigeria, TUC, counterpart, also expressed concerns over non-payment of benefits to those who are already pensioners – especially by state governments.

Pension-hungry politicians

Reading the joint May Day speech by NLC and TUC, President of NLC, Ayuba Wabba, told workers and other guests at the event that the continued withholding of contributory pensions deduction by employers was getting out of hand and something needed to be done.

According to him: “Incidences of unlawful and illegal withholding of contributory pension deductions from workers’ salaries and not remitting same to their Pension Fund Administrators, PFAs still abound. In Ogun State, deductions from workers’ salaries were unjustly withheld for close to one hundred and five months. It took the mobilisation of workers in Ogun State and beyond to make the state government budget. We will never allow such unjust treatment of workers and infractions on their rights to linger that long.

“The unpleasant situation where workers retire from public service and are forced to wait for several months for their pension benefits to be processed still persist. The lethargic and non-payment for those who are already pensioners – especially by state governments, continue to militate against the smooth operation of pension administration in our country. We call on all employers of labour and the three tiers of government to promptly remit all contributory pension deductions to workers’ PFAs.”

FAAC disbursements to FG, states, LG drop to N1.93trn 

It did not end there, Wabba went further to point out that, “some states still owe workers and pensioners salaries and pension, respectively, in arrears. Some states owe pensioners many months of pension arrears despite the bailout funds, budget support fund and the Paris debt refund. The inhuman treatment of pensioners has exposed many of our senior citizens to unnecessary hardship. Many of them are down with avoidable ailments and even died untimely while waiting for their pension allowances. This situation is deplorable and sends wrong signals to workers still in active service.”

Challenges facing states

It will be recalled that the Acting Director-General of National Pension Commission, PenCom, Aisha Dahir-Umar, in a chat with Vanguard gave insight into the challenges facing the implementation of the Contributory Pension Scheme, CPS, across the states.

According to her: “The implementation of the CPS has indeed been quite challenging for the states and local governments, amidst the tough financial constraints occasioned by low internally generated revenues and dwindling crude oil receipts into the Federation Account. Other key challenges militating against the implementation of the CPS as observed in various states have been the lack of political will on the part of state governments and the inordinate allocation of scarce resources to less impactful projects. Many state executives would rather invest in infrastructure that could be visible and therefore serve as a means for gaining political capital than settle pension obligations to retirees. Furthermore, history has shown that accruing pension liabilities under the Defined Benefits Scheme carries very little if any, repercussions as some state executives had served their full terms (four years) without paying gratuity or pension and nothing happens. This contrasts with the CPS which, to some extent, has measures to guard against defaults in contributions and/or remittance by the government (the employer).

Other than lack of political will on the part of many state executives, the Nigerian workers are generally apprehensive towards the CPS due to ignorance of the workings of the scheme. Many workers, including those vested with the responsibility of ensuring smooth implementation of the scheme, fail to realise that the CPS protects their interest more than the Defined Benefits Scheme. As a consequence of this ignorance, therefore, they fail to ensure timely and adequate deduction of pension contributions or remittances of same. This leads to the phenomenon of unfunded RSAs or delayed remittances with the attendant effect of loss of income on pension assets.

Another obstacle to the adoption or full implementation of the CPS in many states is the reluctance by senior public servants in the states to embrace the scheme. The apprehension towards the CPS is worse among the senior public servants who keep shifting the goal post for the adoption of the scheme to a time when they would have retired from service under the defined benefits scheme.   This has resulted in unending shifts in the commencement dates of the CPS by many states or feet dragging in the adoption of the scheme in the states.

Kindly Share This Story:
All rights reserved. This material and any other digital content on this platform may not be reproduced, published, broadcast, written or distributed in full or in part, without written permission from VANGUARD NEWS.


Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.
Do NOT follow this link or you will be banned from the site!