Your Excellency, the Governor of Kaduna State, Malam Nasir Ahmad El-Rufai
Your Excellency, the Dep. Governor of Kaduna State, Mr. Bala Bantex
The Secretary to the State Government, Mr. Balarabe Abbas Lawal
The Head of Service, Mrs. Bariatu Mohammed Yusuf
The Director-General, National Pension Commission, Mrs. Chinelo Anohu-Amazu
Honorable Commissioners
The Interim Management Committee Chairmen of Local Government Areas
Permanent Secretaries
Heads of Agencies
Chief Executives and staff of Pension Fund Administrators (PFAs)
Gentlemen of the Press
Distinguished Ladies and Gentlemen

On behalf of the Board, Management and Staff of the Kaduna State Pension Bureau, I most heartily welcome you to this august occasion, which marks a turning point in the history of pension administration in Kaduna State. We are gathered here today to formally mark the commencement of payment of pension benefits under the Contributory Pension Scheme (CPS) in Kaduna State, a journey that commenced since 2007. We appreciate and commend the commitment of His Excellency, The Governor of Kaduna State, Mallam Nasir Ahmad El-Rufai for not only sustaining the policy of previous administrations in the State on pension administration, but injecting a new lease of life into it and ensuring that the change process is accentuated and consummated.

The Contributory Pension Scheme (CPS) was introduced in Nigeria in 2004 with the enactment of the Pension Reform Act (PRA) 2004. The scope of the PRA 2014 was restricted to Federal and FCT employees as well as private sector organizations with five or more employees. However, the PRA 2014 widened the scope of coverage in the private sector to include employers with at least three employees and made the self-employed and persons working in the informal sector eligible to participate in the CPS. The PRA 2014 also extended the coverage of the CPS to States and Local Governments.

In Kaduna State, the Contributory Pension Scheme Law was introduced in 2007, but the contributions commenced in March, 2008. However, it is worthy of note that implementation was not in total conformity with the provisions of the law as may be outlined.

i. In many cases, the employer (the State and Local Governments) did not remit the employer portion of the contribution into the RSAs of their employees as provided in the Law.
ii. For those whose contributions were deducted, not the whole amounts were remitted into the employees’ Retirement Savings Accounts (RSAs) in some cases.
iii. The savings to fund accrued rights of employees were not made as required under the Law.
iiii. The institutional arrangement to ensure implementation of the Law was absent.
These and many other handicaps necessitated the repeal of the 2007 State Pension Law as amended and a new State Pension Law (the Kaduna State Pension Reform Law, 2016) was enacted in March, 2016.

I wish to commend the initiative of His Excellency, the Governor of Kaduna State for championing the repeal of the defunct State Pension Law and the active support of the State Legislature in ensuring that the State has a workable Pension Law that addresses all the identified challenges that hitherto hindered the effective implementation of the Contributory Pension Scheme in the State.

Some of the key features of the present State Pension Law include:
i. an increase in the contribution rates to a total of 20%, the highest contribution rate by any employer in the country;
ii. merger of the Bureaux of State and Local Government Pension and creation of the State Pension Bureau as a separate legal entity to regulate and supervise pension matters in the State; and
iii. the provision for the opening of the Retirement Benefits Bond Redemption Fund Account at the Central Bank of Nigeria (CBN) for accumulation of funds to pay accrued pension rights.
These initiatives, combined with the commitment of His Excellency, The Governor, have positioned Kaduna State among the few States that are on track in the implementation of the Contributory Pension Scheme in Nigeria.

The Law has also provided for the merger of not just the institutions charged with the responsibility of pension administration in the State, but also the fusion of the two pension schemes in operation in the State. The State Pension Bureau, which was created by the 2016 Pension Law combines the functions and responsibilities of the defunct State and Local Government Bureaux of Pension. The Bureau is responsible for administering both the Defined Benefits Scheme as well as the Contributory Pension Scheme in the State.

In order to deliver on its mandate, the Bureau successfully completed the administrative procedures that resulted in the merger of the defunct Bureaux of Pension in 2016. Building on the successes of the pensioners’ verification exercise that took place in the State in 2015, the Bureau has vigorously embarked on pensioners’ payroll cleansing in the State. As at February, 2017, there were 9,655 pensioners in the payroll of State Pensioners and 6,728 in that of Local Government Areas compared to the 11,531 and 6,734 respectively in the payrolls as at July, 2015.
The February 2017 figures were inclusive of additional new retirees on the payroll between August 2015 and January, 2016 who were not part of the July 2015 figures and whose retirement processes had been verified and cleared by the Offices of the State and Local Government Auditors-General.

We however expect a surge in the payroll for pensioners on the Defined Benefits Scheme in subsequent months due to the large number of people who retired towards the end of 2016 to avoid falling into the Contributory Pension Scheme whose files are yet to reach the Bureau for processing and inclusion in the payroll. Unless MDAs and LGAs forward the files of all retirees under the Defined Benefits Scheme to the Bureau for processing in good time, our pension payroll may continue to rise throughout 2017. Conversely, we were not able to find many retirees under the CPS in the first quarter of 2017 due to the rush to take early retirement in 2016 especially by such people.

The Bureau commenced biometric data capture of retirees using its own IT infrastructure and personnel as from November, 2016. With this initiative, the waiting time for retirees to be included in the pension payroll has reduced drastically to a maximum of one month after audit clearance, thereby saving the retiree the pains of staying longer after retirement without income. The application deployed for this data capture is robust enough to permit diverse queries and reports to be generated from the database.

Furthermore, to address the challenge of the dreaded pensioner verification exercises that bring untold hardships to our frail and sick senior citizens, as part of the proposed Pension Management Information System (PMIS) of the Bureau, the Bureau has concluded plans with the SIFMIS Project Managers, Gems Consulting Company, for a stress-free verification exercise that requires minimum effort on the part of the pensioner. When the application is deployed, pensioners would only be required to provide their thumbprints within specific time intervals at a branch of any bank in Nigeria to confirm that they are still alive. With that confirmation, they would continue to enjoy their monthly pension unhindered. However, failure to do that after the specified time interval, they would automatically be suspended from the pension payroll until they do so. We believe that the deployment of this initiative would not only address the nagging problem that pensioners usually face, but would also save the Government significant sums of money that are lost to deceased pensioners who often remain on the pension payroll. This is because the relatives of the deceased pensioners often refuse to report the death of the pensioner and since payment is made to banks, they use the deceased’s ATM cards to withdraw from the accounts making it look like the pensioners were still alive.

The State has put the Group Life Insurance Policy in place for its employees; the Kaduna State public sector has been opened to all PFAs to scout for RSA business; and the Retirement Benefits Bond Redemption Fund (RBBRF) Account has been opened at the CBN. Furthermore, the Bureau, acting on the directives of His Excellency, The Governor, and working with the Ministry of Finance, had engaged a firm of Actuarial Valuers, HR Nigeria Limited, to conduct an Actuarial Valuation to determine the pension liabilities that accrued in favour of the State employees in accordance with the requirements of the State Pension Law.

We have received the first draft report of the Consultant on Actuarial Valuation. A total of 8,201 records could not be analysed out of 60,882. Most of the problems were from Local Government Areas and Agencies. These have been returned for corrections by the MDAs/LGAs concerned. As a result of this, the Consultant has not been able to conclude the valuation exercise as scheduled. This has the consequence of denying the State the ability to accurately estimate its Accrued Pension Rights Liability at the moment.

One of the major challenges facing the implementation of the CPS in Kaduna State is ignorance. Despite the introduction of the Scheme in the State since 2007, majority of workers in the State, irrespective of their levels, remain ignorant about how the Scheme works. Consequently, the Bureau commenced aggressive sensitization on radio, television and face-to-face at MDAs and Local Government Areas as from November last year. The Bureau has also mapped out a programme to assist MDAs in complying with the provisions of the Law as from January, 2017. Under this arrangement, Staff of the Bureau visit MDAs to assist them in preparing their payrolls in a manner that takes into account the requirements of the Law with respect to employer and employee contributions as well as the funding of the Retirement Benefits Bond Redemption Fund Account at the CBN. The level of compliance observed was encouraging as many MDAs were able to amend their payrolls accordingly or promised to effect necessary corrections as from February, 2017.

The Bureau has been working closely with the Ministry of Finance to attain full compliance with the provisions of the CPS Law in Kaduna State. Though the Ministry of Finance could not remit the employer contribution and the 5% contribution to the RBBRF within the seven days of payment of salary in January as provided by the Law, this was eventually done within 21 days. We look forward to timely compliance with this provision as from February, 2017. Similarly the Water Corporation is the only self-funded Agency that has fully complied with remittances in January. We encourage the Interim Management Committee Chairmen of all the Local Government Areas as well as the Chief Executives of the self-funded agencies in the State to respect these provisions of the law too in the interest of their workers.

The administration of the CPS is designed to be an automated pension administration system. Consequently, the Bureau has discussed with Gems Consulting Company, the SIFMIS Project Managers, on a Pension Management Information System (PMIS) that would drive the contributory pension administration system in the State. When deployed, the Bureau shall be able to monitor pension deductions by all MDAs remotely. The application would also have the capacity to monitor remittances by the Budget, Accounts and Treasury Management Information System (BATMIS) as well as link the Bureau to PenCom’s supervisory platform.

Your Excellency, we are pleased to acknowledge the unflinching support you have given the Bureau in all respects to ensure that we evolve a dependable pension administration system in the State. We want to assure you that we shall not fail you. Given the support the Bureau has been enjoying from you and other stakeholders in the administration of pension in Kaduna State, the Bureau has set a target of attaining a FULL COMPLIANCE STATUS for the State from the National Pension Commission by the third quarter of this year. Preparatory to this, we appeal to Your Excellency to expedite action on the acquisition and installation of the Information and Communications Technology infrastructures at the Bureau in accordance with PenCom specifications, the deployment of the Pension Management Information System (PMIS), and the renovation of the Bureau’s Offices.

Distinguished ladies and gentlemen, the Board, Management and Staff of the State Pension Bureau would like to thank you tremendously for gracing this occasion with your presence. As we commence the payment of pension benefits under the Contributory Pension Scheme in Kaduna State today, we are hopeful that this would mark the beginning of the end to delays in accessing pension benefits in Kaduna State. We are committed to the change process in pension administration in the State and we count on your cooperation in making this come true.

We extend our profound appreciation to the Management of the four PFAs that were selected by the State to manage the scheme in the State before the latest reform. They have supported the Bureau with the working tools that got us started and have facilitated this occasion with their financial contributions.

We wish to specially thank the Director-General of the National Pension Commission for her unparalleled support to the Bureau and Kaduna State. She has made herself available to the Executive Secretary of the Bureau at any time and also granted the Bureau access to all the intellectual resources of the Commission by releasing staff of the Commission to assist the Bureau on any technical aspects of our work at the expense of the Commission. She has also ensured express attention to all requests from the Bureau.

Thank you all and welcome to this occasion.
Dan Ndackson

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