COVID-19: Group implores FG to rethink contributory pension scheme

The Centre for Consumer Concern has implored the federal and state governments to consider the withdrawal of at least 20 per cent of retirement savings after one month of unemployment, not withstanding the age of the employee, while those temporarily laid off or on unpaid leave should be allowed to access a maximum of 15 per cent of their retirement savings.

The Centre, through its Convener, Mr. Muyiwa Ayojimi, said much needs to be done, reason it is advocating that government, through the appropriate Ministry, to release a guideline in the area of pension that would give succour to both the employer and the employee.

“Both parties have been adversely affected by the COVID-19 pandemic. Labour and employment relations have been impacted.” He recommended that employers pension contribution of 10 per cent monthly to employees Retirement Savings Account should be paid by the government or even reduced. “The Suspension of the Contributory Pension Scheme can also represent a social welfare security for 2020.”

Ayojimi said since Sections 7 and 16 of the Pension Reform Act provide that an employee can make 25 per cent withdrawal from his pension account on attainment of 50 years or upon retirement/four months of unemployment.

“Whichever one is later, the employee should be allowed to make the 25 per cent withdrawal in one month, as this would help the employee, who is out of job and cannot settle bills or meet basic obligations at this time to do so. A couple was laid off from work recently. How do they cope?”

He stated that other climes have initiated similar palliatives. “Finland and Colombia, for example, have lowered their pension contribution rate for the remainder of 2020; Australia passed the Coronavirus Economic Response Package Omnibus Act 2020 for temporary early release of pension benefits. Eligible individuals affected by COVID-19 can access up to $20,000 of their pension till 2021.”

Furthermore, the Centre tasked telecoms operators to increase its investment in infrastructures that would improve their services, as working remotely is now the new normal. The Centre, however, warned that it would begin to roll out its research work on the providers, who have continuously ripped off consumers of value for money, either on data or voice services.