Only five states are paying pensions under the Contributory Pension Scheme as more workers retired by the end of the first quarter of 2022, findings have revealed.
This development has generated concerns for the National Pension Commission because many of the states that have joined the CPS have not started making preparations or set funds apart for pension payments.
PenCom listed the states that were funding the accrued rights of the retirees and paying pensions under the CPS to be Lagos, FCT, Osun, Kaduna and Delta.
Data obtained from PenCom on ‘Status of implementation of the CPS by states’ showed that 25 states had enacted laws on the CPS and that out of them, 15 had pension bureaux and boards in line with the CPS.
The data revealed that the 25 states are Lagos, FCT, Osun, Kaduna, Delta, Ekiti, Ondo, Edo, Benue, Kebbi, Niger, Rivers, Ogun, Bayelsa, Kogi, Anambra, Abia, Taraba, Imo, Sokoto, Adamawa, Ebonyi, Nasarawa, Enugu and Oyo.
According to the data, Kwara, Plateau, Cross Rivers, Borno, Akwa Ibom, Bauchi, Katsina and Yobe states were at the bill stage of joining the CPS.
PenCom data showed that states with other pension schemes were Jigawa, Kano, Gombe and Zanfara.
The pension regulator stated that “The commission engaged the of Rivers State, expressing concern over the state’s inability to take steps to fully implement the CPS in the state, in view of the impending commencement of retirement of employees of the state under the CPS as from 1 June 2022.
“The commission also engaged the of Ogun State on the persistent non-remittance of pension contributions into the state employees’ RSAs by the state, in view of the fact that employees of the state would start retiring under the CPS as from 1 July 2025.”
It added that it carried out sensitisation workshops, capacity-building programmes, and stakeholder engagement meetings during the quarter under review, including, but not limited to meeting with representatives of the Ekiti State Pension Commission, which discussed the challenges being faced in the implementation of the CPS in the state.
PenCom said it made presentations at the pension management retreat organised by the FCT Area Councils Staff Pension Board in Akwanga, Nasarawa State, and that the presentations were on the CPS implementation challenges with emphasis on uncredited contributions.
The Chairman/Chief Executive Officer, Achor Actuarial Services Limited, Dr Pius Apere, explained that the Nigerian pension industry has been operating two pension regimes concurrently since 2004, which are the Pay-As-You-Go defined benefit scheme (the old unfunded pension regime); and the CPS under the Pension Reform Act 2014 as amended.
“Nigerian pensioners have two basic expectations under the CPS, namely to have sustainable standard of living in retirement and receive their retirement benefits as and when due,” he said
Apere noted that the delayed or inability of the Federal Government and state to remit the accrued pension rights to the individual retirees Retirement Savings Accounts on a timely basis had increased the plight of pensioners because the regulator insisted that the retirement benefits would not be paid from RSA without the accrued pension rights being added to it.