The state has accrued pension rights arrears, it has yet to open a retirement benefit bond redemption fund account, it has yet to begin funding the accrued pension rights, and it has yet to institute a group life insurance policy.
The only thing it has done is pass a law on the CPS in 2008, which was amended in 2013 to extend the transition period to 2025.
During the tenure of former Governor Ibikunle Amosun, the state deducted 7.5% employer and 7.5% employee pension contributions under the Contributory Pension Scheme (CPS), but has not remitted them since 2015.
The state government established two Pension Bureaux – state and local government; registered employees with Pension Fund Administrators (PFAs); and began deducting wages from workers without remitting them to the PFAs. The implication is that state employees and retirees will most likely have no pension benefits to fall back on after retirement.
The situation in Oyo State is the worst in the Southwest Zone.
In 2010, the state passed a CPS law under the administration of Christopher Alao-Akala.
The state pension liability skyrocketed during the late Governor Abiola Ajimobi’s administration.
According to PenCom (the Commission), the state submitted a Bill to amend the Principal Law in 2018, and the Commission has since communicated to the state its observations on the review of the draft amendments.
According to the Commission, the state has yet to begin remittance of pension contributions, conduct an actuarial valuation, open a Retirement Benefits Bond Redemption Fund Account, establish a Pension Bureau, begin the funding of accrued pension rights, register its employees with PFAs, and institute a Group Life Insurance Plan.
The backlog of un-remitted pension contributions and accrued pension rights in Osun State is enormous.
The report also revealed that the state is not adequately funding accrued pension rights.
However, the state has made some progress, having enacted a CPS law in 2008, established two Pension Bureaux – state and local governments, and registered its employees with two PFAs.
Despite a backlog of pension contributions from May 2019 to last July, the state remitted 7.5% employer and 7.5% employee pension contributions up to last December for state employees.
In addition, the state has carried out an actuarial valuation, has a valid Group Life Insurance Policy, and has opened a Retirement Benefits Bond Redemption Fund Account with the Central Bank of Nigeria (CBN).
Ekiti State has also enacted a CPS law, conducted an actuarial valuation, amended the pension law in 2017, opened a Retirement Benefits Bond Redemption Fund Account with the CBN, established a Pension Bureau, registered its employees with PFAs, and remitted 10% employer and 8% employee pension contributions as of last September.
However, the state has yet to implement a Group Life Insurance Policy and begin funding the accrued pension rights.
Lagos State has continued to set the standard for the Southwest and the rest of the Federation.
It has implemented the pension contribution increase law by contributing 10% of the total increase.
The state’s only concern is that it has accrued pension rights in arrears.
The state was the first to enact a CPS law in 2007; it conducted an actuarial valuation and amended some sections of the Principal Law in 2019; it funds employees’ accrued pension rights but has arrears.
It has established a Pension Bureau; it recently opened a Retirement Benefits Bond Redemption Fund Account with two PFAs for state and local governments; it has registered employees with PFAs; it has remitted 10% employer and 8% employee contributions; and it has a valid Group Life Insurance Policy for its employees.
According to the report, Ondo State is second only to Lagos in terms of PenCom because the state enacted a CPS Law in 2014, established a Pension Bureau, registered its employees with PFAs, remitted 10% employer and 8% employee pension contributions up to January 2021, and has a valid Group Life Insurance Policy.
However, no actuarial valuation has been performed because state employees covered by the CPS have no accrued pension rights.
Source: The Nation