As more workers retire by the end of the first quarter of 2022, only five states are paying pensions under the Contributory Pension Scheme, according to findings.
This development has caused concern for the National Pension Commission, as many of the states that have joined the CPS have not yet begun pension payment preparations or set aside funds.
PenCom listed Lagos, FCT, Osun, Kaduna, and Delta as the states funding the accrued rights of retirees and paying pensions under the CPS.
According to data obtained from PenCom on the ‘Status of implementation of the CPS by states,’ 25 states had enacted CPS-related legislation, and 15 of those states had pension bureaux and boards in accordance with the CPS.
The data revealed that the 25 states are Lagos, FCT, Osun, Kaduna, Delta, Ekiti, Ondo, Edo, Benue, Kebbi, Niger, Rivers, Ogun, Bayelsa, Kogi, Anambra, Abia, Taraba, Imo, Sokoto, Adamawa, Ebonyi, Nasarawa, Enugu and Oyo.
According to the data, Kwara, Plateau, Cross Rivers, Borno, Akwa Ibom, Bauchi, Katsina and Yobe states were at the bill stage of joining the CPS.
PenCom data showed that states with other pension schemes were Jigawa, Kano, Gombe and Zanfara.
The pension regulator stated that “The commission engaged the government of Rivers State, expressing concern over the state’s inability to take steps to fully implement the CPS in the state, in view of the impending commencement of retirement of employees of the state under the CPS as from 1 June 2022.
“The commission also engaged the government of Ogun State on the persistent non-remittance of pension contributions into the state employees’ RSAs by the state, in view of the fact that employees of the state would start retiring under the CPS as from 1 July 2025.”
It added that it carried out sensitisation workshops, capacity-building programmes, and stakeholder engagement meetings during the quarter under review, including, but not limited to meeting with representatives of the Ekiti State Pension Commission, which discussed the challenges being faced in the implementation of the CPS in the state.
PenCom said it made presentations at the pension management retreat organised by the FCT Area Councils Staff Pension Board in Akwanga, Nasarawa State, and that the presentations were on the CPS implementation challenges with emphasis on uncredited contributions.
The Chairman/Chief Executive Officer, Achor Actuarial Services Limited, Dr Pius Apere, explained that the Nigerian pension industry has been operating two pension regimes concurrently since 2004, which are the Pay-As-You-Go defined benefit scheme (the old unfunded pension regime); and the CPS under the Pension Reform Act 2014 as amended.
“Nigerian pensioners have two basic expectations under the CPS, namely to have sustainable standard of living in retirement and receive their retirement benefits as and when due,” he said
Apere noted that the delayed or inability of the Federal Government and state governments to remit the accrued pension rights to the individual retirees Retirement Savings Accounts on a timely basis had increased the plight of pensioners because the regulator insisted that the retirement benefits would not be paid from RSA without the accrued pension rights being added to it.