The House of Representatives has called on the Federal Government to rally States and Local Government Councils’ support for full implementation of the Contributory Pension Scheme ((CPS) in line with the National Pension Commission’s guidelines on the scheme.
The call by the lawmakers was sequel to the deliberation on a motion titled ‘Full Implementation of the Contributory Pension Scheme by the Three Tiers of Government and the Private Sector’ sponsored by Hon. Julius O. Ihonvbere, Hon. Saidu Mohammed Mustafa, Hon. Benjamin Okezie Kalu, and Hon. Abubakar Yahaya Kusada at the plenary.
Moving the motion on behalf of the sponsors, Hon. Ihonvbere recalled that the implementation of the Scheme commenced under the Pension Reform Act, 2004, was repealed and re-enacted in 2014 to set uniform rules and regulations that ease administration and payment of retirement benefits for employees in public and private sectors in the country.
The lawmaker explained the repeal of the Pension Reform Act, 2004 was necessitated by the need to ensure that states and local government councils implement the Scheme and to correct some flaws in the 2004 Pension Reform Act.
For instance, he noted lots of irregularities in the system then that led to many pensioners being owed indefinitely even as more retirees continued to join their rank.
Hon. Ihonvbere said 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.
The lawmaker further noted that although 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 remained low.
He clarified: “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”, the lawmaker warned.
Following the motion, the Whole House adopted it and mandated its Committee on Pensions to investigate the extent of implementation of the scheme by the 36 States governments and report back to it within four weeks for further legislative action.