‘How lack of funding intimidates CPS’
Experts in the insurance sector of the economy, have said that the Contributory Pension Scheme (CPS), may suffer a setback, if the federal government refused to pay increased pension rights in the country.
The doyens spoke at the 2015 Nigerian Insurance and Pension Awards, organised by Inspenonline in Lagos.
The experts condemned a situation where state government and the private sector do not remit or contribute to the Scheme as expected.
According to the National Pension Commission (PenCom), from 2014 to date, there has been a decline in budgetary provision in funding the Retirement Benefit Bonds Redemption Fund (RBBF) account, and the remittance of monthly contribution. The sum of N20.07 billion is required to pay outstanding accrued benefits to deceased and mandatory retirees of the Federal Government from October to December, last year, and N79.16 billion has been computed as the arrears of 15 per cent pension increase owed to 79,961 Federal Government retirees under the CPS as at December 2014.
PenCom noted that N50.20 billion was provided for this year’s FGN Budgetary Appropriation for the Retirement Benefits Bond Redemption Fund (RBBRF) Account presented to the National Assembly, compared to the Commission’s projection of N91.91 billion, a shortfall of N41.71 billion.
A former Pencom director, Ivor Takor, asked the Federal Government to show will to implement the Pension Reform Act (PRA) 2014.
He said that the government’s inability to fund pension accrued rights was seriously affecting the payment of pensions as at when due.
He, however, urged the government to increase the monthly pension remittances from 15 per cent of the workers’ total emolument to 18 per cent as stipulated in the Act.
He said it was important for the state governments to pay the salaries of their workers regularly because if it were not consistent, it would not be possible for them to remit the worker contribution to the pension fund.
He said: “The Federal Government should show moral and political will in complying with the provisions of the Pension Reforms Act 2014. They should commence the implementation of the increase in pension contribution from 15 per cent to 18 per cent.
“It is saddening that some states have failed to embrace the CPS aside the Lagos State that is faithfully remitting employees’ contributions as stipulated by law. The greatest problem lies with the state.
“PenCom said only 10 states have keyed into the CPS, but if you look critically, it is only Lagos State that is somehow implementing the new pension scheme. Yes, the states have commissions, bureaus and laws, but are they contributing as and when due?”