The House of Representatives is set to investigate the extent of implementation of the Contributory Pension Scheme across the 36 States of the Federation.
The House also asks the Federal Government to, as a matter of urgency; ask State governments and Local Government Councils across the country to ensure full implementation of the Contributory Pension Scheme in line with the guidelines set out by the National Pension Commission.
Presently, only the Federal Government and a few state governments have commenced the implementation of the Contributory Pension Scheme which was introduced in 2006 through the Pension Reform Act 2004 and replaces the Defined Benefit Scheme.
Several states across the country are still practicing the Defined Benefit Scheme which has been phased out by the Pension Reform Act.
Adopting a motion on the implementation of the scheme by the three tiers of government and the private sector sponsored by Hon. Julius Ihonvbere and three others, the House, the House asked its committee on Pension to carry out a comprehensive investigation and report back within four weeks for further legislative action.
Moving the motion, Hon. Ihonvbere recalled that the Contributory Pension Scheme (CPS) commenced under the Pension Reform Act, 2004 and was repealed and reenacted in 2014 to institute uniform rules and regulations that ease administration and payment of retirement benefits for both the public and private sectors in Nigeria.
According to him, the repeal of the Pension Reform Act, 2004 was necessitated by the need to ensure that States and Local Government Councils participated fully in the Scheme, as well as to address the limitations and failure of the 2004 Pension Reform Act, following lots of irregularities in the system that saw pensioners being owed indefinitely while the number of retirees continued to grow.
He disclosed that Section 2(1) of the Pension Reform Act, 2014 requires all employees in the Public Service of the Federation (including States and Local Governments), Federal Capital Territory or the Private Sector to participate in the Contributory Pension Scheme.
He said further that in accordance with the provisions of the act, National Pension Commission set out guidelines for the implementation of the Contributory Pension Schemes by States Governments, but regretted that compliance with the provisions of the Act has remained low.
He said, “Section 4(1) (a) and (b) of the Pension Reform Act, 2014 stipulates that employers are expected to contribute 10% of their employee’s monthly emolument whereas employees are to contribute 8% of their monthly emolument, all together saved to the employee’s Pension Fund Administrator (PFA)/ Pension Retirement Savings Account.”
He disclosed that available information suggested that 25, out of the 36 States of the Federation are yet to remit workers’ pensions, while only 17 states in the country have enacted Pension laws.
He drew the attention of the lawmakers to the uncertainties associated with unemployment, illness, disability, death and/or old age, which could be very challenging even for the most advanced economies, given the continuous need to assure workers of their economic and social security after retirement.
He also disclosed that only about 8 States across the country have fully implemented the Contributory Pension Scheme, adding that “if no measures are put in place to ensure that States adhere to the Contributory Pension Scheme in line with the provisions of the Pension Reform Act, 2014, the objective of the Act, which is to establish a pension system that is sustainable and capable of providing a stable and predictable source of retirement benefits for employees across the country, maybe defeated.