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Chuks Udo Okonta
20 months after the Pension Reform Act (PRA) 2014 was signed into law, the federal and state governments have refused to embrace the 18 per cent pension contributions for their workers.
Inspen gathered that the federal government and few states that have embraced the Contributory Pension Scheme (CPS) are still remitting 15 per cent as against the 18 per cent stipulated in the new law.
It was also gathered that the federal government is yet to pay N20 billion pension accrued rights for workers who retire recently.
The President, Pension Fund Operators Association of Nigeria (PenOp), Eguarekhide Longe, said pension operators are still awaiting the government to fulfill its pledge to pay the backlog of the three per cent which has not been remitted since the new law took effect.
He noted that about 60 per cent compliance has so far been achieved as regards the PRA 2014.
“I will put the level of compliance at 60 per cent from the private sector side. On the government side, the former Minister of Finance, Dr Ngozi Okonji-Iweala, said the federal government could not comply with the new 18 per cent minimum, but when compliance starts, it will offset the entire backlog. I think that situation still remains.
“The government has not complied with the 18 per cent yet, it is still paying 15 per cent. Most states’ governments are yet to start paying the 18 per cent,” he said.
He maintained that a lot of private entities are finding it difficult to pay pensions, hence, the 18 per cent is a challenge for some, adding that the 60 per cent is from the contribution rate.