House of Representatives yesterday called on the Federal Government to, as a matter of urgency, urge States and Local Government Councils to ensure full implementation of the Contributory Pension Scheme ((CPS) in line with the guidelines set out by the National Pension Commission.
The call followed a motion titled “Full Implementation of the Contributory Pension Scheme by the Three Tiers of Government and the Private Sector” jointly sponsored by Hon. Julius O. Ihonvbere, Hon. Benjamin Okezie Kalu, Hon. Saidu Mohammed Mustafa and Hon. Abubakar Yahaya Kusada at the plenary.
Moving the motion on behalf of his colleagues, Hon. Ihonvbere noted that the Scheme commenced under the Pension Reform Act, 2004 and was repealed and enacted in 2014 to institute uniform rules and regulations that ease administration and payment of retirement benefits for both the public and private sectors in Nigeria.
He said that the repeal of the Pension Reform Act, 2004 was necessitated by the need to ensure that States and Local Government Councils participate fully in the Scheme, as well as to address the limitations and failure of the 2004 Pension Reform, Act, following lots of irregularities in the system that saw pensioners being owed indefinitely while the number of retirees continued to grow.
Ihonvbere stated that Section 2(1) of the Pension Reform Act, 2014 requires all employees in the Public Service of the Federation (States and Local Governments), Federal Capital Territory or the Private Sector to participate in the Contributory Pension Scheme.
According to him, the National Pension Commission had set out guidelines for the implementation of Contributory Pension Schemes by States Governments, yet compliance with the Pension Reform Act, 2014 has remained low.
He said “Section 4(1) (a) and (b) of the Pension Reform Act, 2014 stipulates that employers are expected to contribute 10% of their employee’s monthly emolument whereas employees are to contribute 8% of their monthly emolument, all together saved to the employee’s Pension Fund Administrator (PFA)/ Pension Retirement Savings Account
“The Leadership Newspaper Publication of 9 November 2020 articulated that 25 out of the 36 States of the Federation are yet to remit workers’ pensions and that only 17 states in the country have enacted Pension laws.
“The uncertainties associated with unemployment, illness, disability, death and/or old age, which could be very challenging even for the most advanced economies, given the continuous need to assure workers of their economic and social security after retirement.
“Although 26 States and the FCT have enacted Pension Laws, only about 8 States have fully implemented the Contributory Pension Scheme, and if no measures are put in place to ensure that States adhere to the Contributory Pension Scheme in line with the provisions of the Pension Reform Act, 2014 the objective of the Act, which is to establish a pension system that is sustainable and capable of providing a stable and predictable source of retirement benefits for employees across the country, maybe defeated”.
Adopting the motion, the House mandated its Committee on Pensions to investigate the extent of implementation of the scheme across the 36 States of the Federation and report back to it within 4 weeks for further legislative action.