Pension

FG should show moral, political will in implementing PRA 2014 – Expert

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Takor

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Chuks Udo Okonta

The Federal Government has been charged to show moral and political will towards the implementation of the Pension Reform Act (PRA) 2014.

A Former Board Member, National Pension Commission(PenCom) Ivor Takor, said this at the 2015 Nigerian Insurance and Pension Awards organised by Inspenonline in Lagos, adding that government’s inability to fund pension accrued rights is seriously affecting the payment of pensions as at when due.

“FG should show moral and political will in complying with the provisions of the Pension Reforms Act 2014.

“They should also commenced the implementation of the increase in pension contribution from 15 per cent to 18 per cent,” he said.

He expressed misgivings over some states failure to embrace the contributory Pension Scheme (CPS), stressing that presently it is only Lagos State that is faithfully remitting employees’ contributions as stipulated by law.

“The greatest problem lies with the State. PenCom said only 10 States have keyed into the CPS, but if you look critically, it is only Lagos State that is somehow implementing the new pension scheme. Yes, the states have commissions, bureaus and laws, but are they contributing as and when due? That is the situation. Then majority of the states don’t have laws. This means the workers have no form of pensions. If they can’t set out fund, they can’t pay salaries, how will they pay pensioners? That is the situation that needs to be addressed holistically and it’s unfortunate that some of these governors left office and made some segmented pension laws that only cover them and their office holders, some of them drawing massively in the name of pension to build houses and cars and did not make laws for the state workers. This is very bad, it’s immoral and it should be addressed by current governors,” he said.

According to the National Pension Commission (PenCom), from 2014 to date, there has been a decline in budgetary provision in funding the Retirement Benefit Bonds Redemption Fund (RBBF) account and the remittance of monthly contribution, adding that sum of N20.07 Billion is required to pay all outstanding accrued ​benefits for deceased and mandatory retirees of the Federal Government ​for the periods October to December 2015 and the sum of N79.16 Billion has been computed as the arrears of 15 per cent pension increase owed to 79,961 Federal Government retirees under the Contributory Pension Scheme (CPS) as at December, 2014.

PenCom also noted that N50.20 Billion was provided for the 2016 FGN Budgetary Appropriation for the Retirement Benefits Bond Redemption Fund (RBBRF) Account presented to the National Assembly, compared to the Commission’s projection of N91.91 Billion, resulting in a shortfall of N41.71 Billion.

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