Workers panic as states shun Contributory Pension Scheme

Director-General, National Pension Commission, Mrs. Chinelo Anohu-Amazu

Civil servants across many states of the federation are concerned for their lives after retirement as many state governments have stopped contributing towards their pension, IFE ADEDAPO writes

The implementation of the Pension Reform Act, 2014 may have come to a dead end as some state governments and workers have pulled out of the Contributory Pension Scheme introduced by the Federal Government.

Investigations by our correspondents showed that the governments and workers were no longer contributing to the CPS in Kebbi, Ondo, Cross River, Osun, Niger, Akwa Ibom and Ekiti states due to controversies surrounding its implementation.

It was also gathered that the governments of Imo, Sokoto, Lagos, Rivers, Abia, Bauchi, Plateau, Edo and Niger states were stalling on the implementation of the PRA 2014, which repealed the 2004 version.

Findings showed that failure to remit deductions made from workers’ salaries and the financial constraints being faced by most of the state governments had made the CPS to be on the brink of failure.

It was gathered that in some states, the government had stopped its own contribution, while in others, no contribution had been made since the inception of the old Pension Reform Act, 2004. The law had made it mandatory for the employer to contribute 7.5 per cent of the workers’ monthly emolument into their Retirement Savings Accounts, while the workers will contribute the same.

In Osun State, the Chairman of the Nigeria Labour Congress, Mr. Jacob Adekomi, told one of our correspondents that the state government had yet to implement the PRA 2014, because remittances based on the 2004 Act had stopped.

His claim was corroborated by the Secretary of the Council of Academic Staff Unions of Osun State Owned Tertiary Institutions, Mr. Olusegun Lana, who said deductions from workers’ salaries for November 2013 were the last funds remitted to their RSAs.

Lana said, “Osun domesticated the 2004 Pension Reform Act in 2008 but the actual implementation of the pension law started in May 2010. The 2014 PRA has not been implemented. Our concern now is that the law with lesser percentage of contribution was not implemented, will the government implement this one with greater obligation for it?”

The Permanent Secretary, Office of Establishment and Training, Ekiti State, Mr. Banji Ojo, said the pension scheme had failed to take off five years after it was passed into law in 2011 due to resistance by labour unions as well as the inability of the state government to meet its financial obligations.

However, the State Head of Service, Dr. Olugbenga Faseluka, explained that a committee on the scheme had been set up to study the Ekiti State Contributory Pension Scheme Law, 2011, alongside the PRA 2014.

In Kebbi, the state NLC Chairman, Murtala Usman, explained that the former state government had not been remitting its own part of contributions into the RSAs since the enactment of the PRA 2004.

He lamented that the workers were fed up and planning to stop their own contributions since the scheme had not been effective.

In Akwa Ibom, Niger and Cross River states, there are controversies over the remittance of deductions to the workers’ Pension Fund Administrators.

The Chairman of the NLC in Akwa Ibom State, Mr. Etim Ukpong, said the state government had stopped deducting workers contributions since the annulment of the PRA 2004.

He stated that the state government had been refunding the workers’ contributions since 2014, adding that the decision to refund the monies was made because the deductions were made before the new bill was passed into law.

In Niger State, the labour union has asked the government to stop the 7.5 per cent being deducted from the workers’ monthly emolument since the state pension commission has claimed that it does not know about the government’s contribution since the commencement of the CPS.

The state NLC Chairman, Yahaya Ndako, stated that the money was not being remitted as and when due and that the scheme had failed to quantify what the workers would benefit.

Ndako said that retirees found it extremely difficult to access their money and that they were suspecting that the state government was not sending its own 7.5 per cent contribution.

In Cross River, there are contradictions over the implementation of the CPS.

While the government insists that workers’ deductions are constantly remitted to their PFAs, some workers say no such remittances are being made.

The Chief Press Secretary to the Governor, Mr. Christian Ita, said the state was one of the first in the country to start the implementation of the CPS.

“We are one of the first few states that started the implementation of the Pension Reform Act of 2014. We have consistently kept fate too by paying the deductions to the Pension Fund Administrators and we do not have any intention to stop because the government is trying to enhance the living condition of the workers,” he said.

Although major union leaders in the state declined comments, a senior civil servant, who did not want his name mentioned, said the workers did not subscribe to the new pension scheme.

“There is nothing like contributory pension administration in the state. No deductions are made and that is why we are still having issues of pensions and gratuities that are pending. This PRA 2014 is only being implemented for federal workers,” he said.

According to findings, government employees in most states of the federation are ready to participate in the CPS in which the contribution of the employer has been increased to 10 per cent, while that of the workers marginally rises to eight per cent under the 2014 version of the PRA instead of the uniform 7.5 per cent each stipulated by the 2004 law, but the state governments are not ready to make any commitment.

The Chairman, NLC, Abia State, Uchena Obigwe, said that the new government was working with the union to enact the state version of the law.

“We are still in the process of enacting it. The former administration of the NLC and the former governor of Abia State could not do anything on it. It is the new government of the NLC and state government that are putting heads together to ensure that something happens. There has been no remittance at all. We are still operating the old system,” he said.

Similar responses were also received from the Bauchi and Plateau states’ branches of the NLC.

However, the labour leaders in Imo and Sokoto states said the CPS was not in operation in the state and could not provide the reasons why it was so.

In Rivers and Lagos states, labour leaders explained that Federal Government workers had started making eight per cent contribution to their RSAs, but no action had been made to repeal the 2004 PRA by the state governments.

The Rivers State Chairman of the Trade Union Congress, Mr. Chika Onuegbu, said, “This means that as of today, the law that is guiding pension contribution in Rivers State is still the 2009 Pension Act as amended in 2012. It means employer and employee still contribute 7.5 per cent each and that is what is still guiding it.

“We had earlier this year written to the state House of Assembly, asking them to amend the law so that the employer will contribute 10 per cent and the employee will contribute eight per cent in line with the 2014 Pension Reform Act, making a total of 18 per cent. But that has not been done yet,” he said.


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