Six states comply with contributory pension scheme
Close to a decade after the enactment of the Pension Reform Act (2004), 24 states in the country are yet to have any form of pension arrangements for their workers.
The President of Pension Fund Operators Association of Nigeria (PENOP), Dave Uduanu, giving as run down of the levels of engagement by different states during the yearly general meeting of the association in Lagos last week, said only states have fully complied with the Contributory Pension Scheme (CPS) according to the Pension Reform Act 2004.
According to him, six other states have their own pension arrangements in place for their employees.
Uduanu said during the officials of the Pension Commission had begun to go round the states to educate officials of the affected states on the need for them to key into the contributory scheme for the benefit of its workers.
In his view, the review of the Pension Reform Act 2004 that is currently going on in the National Assembly will strengthen the act to bring the informal sectors of the economy into the contributory scheme.
He said that the regulators of the sector were already working at bringing the operators in the informal sectors of the Nigerian economy into the fold.
He said the regulators have realised that the informal sector was by far larger than the formal sector, hence the need to bring the retirement savings account to the sector.
According to him, the new pension system was built on accountability and transparency, quite unlike the old defined benefit scheme, where you heared of disappearance of pension, long queues of elderly people waiting for pension payment.
He said that the case is different under the Contributory Defined Benefits Pension Scheme, as clients have access to their retirement savings accounts (RSA) and they could also monitor the contributions and growth of their pensions over the period of their active years of service.
The chief executive officer, Stanbic IBTC Pension Managers Limited, Dr. Demola Sogunle, said that the operation of the contributory pension scheme in the country was one of the beautiful things that has happened in the country, as over N3.4 trillion pension assets has been accumulated, and 5.3 million contributors captured in the CPS.
He said that over 54 million working Nigerians were still not captured in the pension reform.
The commission and association, Shogunle pointed out, are partnering to help enlighten Nigerians on the need to capture all workers in the system.
He said, 'We need to extend the benefits of the new scheme to many Nigerians and a coverage ratio of about 25 per cent will translate to touching the lives of about 18 million Nigerians. The impact of this on the economy, on the one hand, and the social well being of average Nigerian on the other are enormous.
'Our pensions business is not relenting in getting the messages of the CSP out there. We will continue in our drive to register customers even in the formal sector who are yet to come under the CPS. We believe that continued awareness of the CPS will also go along way in getting more people to the join the system.'