Low Participation Of States In CPS, Worrisome, PenCom DG

 

By allcitynews.ng 

The  Director General of apex pension monitoring body, National Pension Commission (PenCom) has expressed worry over the unwillingness of states to come under the umbrella of Contributory  Pension Scheme (CPS).

Worried that only seven states are under  the umbrella of the scheme despite all efforts to pull all states into the fold, the DG, Omolola Oloworaran, described the low participation as worrisome.

The DG lamented that despite the efforts put in place to simplify  the scheme to enable all workers join, only seven states out of 36 states have joined.

PenCom made the disclosure during the maiden edition of its bi-annual consultative session for Heads of Service of states yet to fully adopt or implement the scheme.

According to the commission, the meeting was convened to deepen pension reforms at the sub-national level and address challenges hindering full compliance with the CPS framework.

Under the CPS, both employers and employees are compelled to make monthly contributions into a Retirement Savings Account managed by Pension Fund Administrators.

The scheme currently requires employers to contribute a minimum of 10 per cent of an employee’s monthly emoluments, while employees contribute at least eight per cent.

PenCom said the consultative session provided a platform for engagement, knowledge sharing, and collaboration aimed at strengthening implementation of the pension reforms across the states.

On her part, the Head of the Civil Service of the Federation, Didi Esther Walson-Jack, during the meeting stressed the need for stronger commitment by states to pension reforms.

She noted that although many states had enacted pension laws in line with the Pension Reform Act, implementation remained weak in most parts of the country.

The discussions, according to the commission, focused on practical support mechanisms, the benefits of the CPS, and ways of overcoming challenges slowing adoption at the state level.

The commission added that the initiative forms part of its broader efforts to promote a sustainable pension system nationwide and ensure that workers receive their retirement benefits promptly and efficiently.

PenCom has consistently urged state governments yet to implement the scheme to do so in order to protect workers from the uncertainties associated with unfunded pension liabilities.

The CPS is regarded as one of Nigeria’s major public sector reforms designed to ensure transparency, sustainability, and long-term financial security for retirees.

It would be recalled that PenCom, through Pension Reform Act of 2004, introduced the scheme which started operational from June 25, 2004.

The 2004 scheme replaced the outdated Defined Benefits Scheme (DBS) that was a source  of discouragement to workers because under DBS workers slow payment of pension arrears, weak funding, and delays in payment of retirees’ entitlements. The law was later amended through the Pension Reform Act 2014 to strengthen regulation and expand coverage.

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