Written by Sarah NEGEDU

Contributory pension suffer setback in 23 states

Since the establishment of the Contributory Pension Scheme, CPS, over a decade ago, only 11 states including federal capital territory are said to have fully complied with the scheme.

Though the scheme is at different stages of implementation in 23 other states, CPS seem to have been completely ignored in others.

The Contributory Pension Scheme was established by the Pension Reform Act of 2004. The participation of state governments in the CPS is in line with the pension reform act 2014 which makes it compulsory for states and local governments to implement contributory pension schemes for their employees.

Under the CPS arrangement, employees and employers contribute towards the payment of the employee’s pension at retirement. This is to ensure that all employees in the public and private sectors in Nigeria, including self-employed persons, receive their retirement benefits as and when due.

The minimum rate of contributions is 18 percent of the employee’s monthly emoluments, where 10 percent is contributed by the employer and eight percent is contributed by the employee.

However, a publication by the National Pension Commission, PenCom, suggests that only 11 out of the 36 states of the federation had commenced full remittance of pension contributions of their workers. They include Lagos, Osun, Ogun, Ondo, Kaduna, Delta, Anambra, Jigawa, Edo and Ekiti as well as the Federal Capital Territory.

The document showing the status of implementation of the scheme by states further indicates that while 13 out of the 23 states had enacted laws to guide the implementation of the scheme, they had yet to commence remittances.

The states are Adamawa, Bayelsa, Ebonyi, Enugu, Gombe, Imo, Kano, Kogi, Nasarawa, Oyo, Sokoto, Taraba and Abia.

PenCom also noted that eight out of the 23 states had commenced the framework for the implementation with bills that pending at their respective Houses of Assembly. They are Bauchi, Benue, Borno, Cross River, Katsina, Kwara, Plateau and Akwa Ibom.

While Zamfara, Kebbi and Rivers states are remitting only the employees’ portion of pension contributions, Yobe state is yet to implement the contributory pension scheme in any form.

The Pension regulator, PenCom, had recently revealed that the country’s total pension fund assets had risen to N7.77trillion as of February 2018, due to increase in the enrolment of CPS.

The number of contributors under the scheme had grown steadily by over 390,000, increasing from 7.50 million in March 31, 2017 to 7.90 million by February 28, 2018.

Search

Latest posts

PhotoABU gets NUC approval for business school

Ahmadu Bello University, ABU, Zaria, has secured the approval of the National Universities Commission, NUC, for its newly established Business Scho [...]

23 September 2018

PhotoFG wants UNESCO to sustain interventions

The Nigerian Government has called on the United Nations Educational, Scientific and cultural Organisation, UNESCO, to sustain its educational inte [...]

23 September 2018