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CIIN TASKS STATES ON CONTRIBUTORY PENSION SCHEME

By NBF News
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By ROSEMARY ONUOHA
The Chartered Insurance Institute of Nigeria has said that State governments should key into the Contributory Pension Scheme being regulated by the National Pension Commission to avail its workers of a better life after retirement.

President of the CIIN, Mr. Wole Adetimehin, who said this in Lagos, noted that the situation whereby states have refused to key into the contributory pension scheme is posing a future disaster for retirees.

Adetimehin said 'Look at the Pension Reform Act of 2004, apart from the federal level or Lagos state; I cannot point at any other state government that is complying with that Act.'

Adetimehin said that some states started it at first but stopped abruptly and have refused to remit moey that they withdraw from workers salary to the Pension Fund Administrators.

Adetimehin said 'Ogun State started the contributory pension scheme for its workers initially but allowed it to go moribund after some time. Worst is that they deducted peoples money but they didn't remit any money to the PFAs. This is one of those things pending in the court.'

Corroborating Adetimehin standpoint is the Chairman, Pensions Operator' Association of Nigeria, Mr. Dave Uduanu who said that States and Local Governments in the country are the biggest albatross of the Contributory Pension Scheme powered by the Pension Reform Act 2004.

Dave said that of the 36 states in the country, only about 10 are partially complying with the pension scheme even when they regularly deduct monies from workers salaries at source.

According to Uduanu, a greater percentage of the States that have passed the enabling Pension Bill are not funding their employees' accounts while some that commenced funding stopped several months ago.

He said 'The states are major beneficiaries of the pension scheme. Pension fund investments in state bonds grew significantly by 106 per cent from N34 billion in 2009 to N70 billion in 2010 and currently stands at over N100 billion. With the pension bill for some States serving as a platform to source for pension fund investments in proposed State Bonds, there is the need for these States to buy into the scheme fully by funding the accounts of their employees in order to sustain the scheme'

Uduanu lamented that it is alarming that the acceptance and participation level in the scheme by the respective States and Local Governments is not satisfactory, adding 'Of the 36 States in the country, not more than 10 States (22%) can effectively be considered as near full-compliant. I believe that the time is now right to make the scheme compulsory at both states and Local Government levels.'