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States and Contributory Pension Scheme

The recent report that about 15 states in the country are yet to enroll their workers into the national Contributory Pension Scheme (CPS), despite enacting the statutory laws to commence its implementation is deplorable. The damning report from the National Pension Commission (PenCom) indicated that the affected states have not started remittances into their workers’ Retirement Savings Accounts (RSA), thereby putting the future of these workers at grave risk.    

It also stated that one state has not even commenced the process of implementing the law on the CPS. Three states, according to the report, only remit employees’ portion of the pension contribution. Remittances from some states were irregular, thereby resulting to huge backlog of contributions. Only six states and the Federal Capital Territory (FCT, Abuja) had complied fully with the scheme.

The national pension scheme is designed to provide employers and employees opportunities to contribute to a retirement savings package for their workers. Under the contributory pension scheme, the employer and the employee contribute 7.5 per cent of employees’ monthly emoluments (basic salary, transport and housing allowances).

We decry the poor participation in the scheme by state governments and call on the workers in the affected states to demand for their rights from the governors. Pension for workers is a right that must not be denied. This injustice to workers must be redressed forthwith. Despite the poor compliance by states by failing to pay into the scheme, the net asset value of the CPS as put by the Acting Director General of PenCom, Mrs. Aisha Dahir-Umar, was N7.779 trillion as at February 28, 2018.

She also said that the number of pension contributors under increased by 390,000 from 7.50 million in March 2017 to 7.89 million contributors as at December 2017 and 7.90 million as at February this year.

It is regrettable that many states are not fully participating in the national pension scheme. The situation does not augur well for workers in the affected states. The pension scheme which is planned for the workers’ retirement package must be embraced by all the 36 states in the federation. No state government should deny its workers the pension benefits.

It is worth restating that the future of workers, whose employers have not enrolled in the scheme or have stopped remitting contributions, is in great jeopardy. We recall that in January 2016, the President of the Nigeria Labour Congress (NLC), Comrade Ayuba Wabba, decried the poor participation of states in the national pension scheme. More than two years after, the story is still the same.

We, therefore, call on the affected states to, as a matter of utmost urgency, to enroll their workers into the national pension scheme without further delay. Putting workers outside the pension scheme is a great disservice to the workers. The affected workers will not put in their best at work. It is in fact capable of causing unnecessary disruptions and unrests in the workplace in the affected states.

Governors of the participating states should use the instrumentality of the Nigeria Governors’ Forum, to call on the defaulting governors to immediately enroll their workers in the pension scheme. The labour unions must ensure that the affected states are compelled to participate fully in the pension scheme.

The aim of the contributory pension scheme is clear. It was designed to ensure that workers get their retirement benefits as and when due. Hitherto, such benefits were delayed or even not paid due to paucity of funds on the part of the government. Let all the defaulting states enroll their workers in the scheme.


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August 2018
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