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The plight of state pensioners

AS the Labour sector and the nation at large get set for the battle to implement the recently-approved National Minimum Wage, the complementary Labour compensation law – the Pension Act – needs to be placed on the centre stage of the total fiscal plan, especially at the state and local government levels.

The Labour compensation law in question is the Contributory Pension Scheme, CPS. By the CPS Act as amended in 2014, the Federal Government had kick-started the implementation for federal civil servants while the private sector has largely keyed into the scheme.

It is worrisome that after many years, the National Pension Commission, PENCOM, is reporting that only 15 states have made progress in the implementation of the scheme, while only eight out of the remaining 21 states have sent bills for its enactment.

A breakdown of the level of implementation of the CPS as contained in a PENCOM report for the first quarter of 2019 shows that 20 states are neither remitting pension contributions nor funding accrued rights and have no group life insurance for their employees.

The states are Imo, Sokoto, Kogi, Bayelsa, Nasarawa, Oyo, Katsina, Akwa Ibom, Benue, Kwara, Plateau, Cross River, Abia, Ebonyi, Taraba, Bauchi, Borno, Gombe and Adamawa states.

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Other states, except the Federal Capital Territory, FCT, and Lagos have no group life in place for their workers. We commend Lagos and Kaduna states as the only states that are up to date in the remittance of pension contributions and funding the accrued rights of employees.

Delta is remitting complete and regular pension contributions for state employees, but remitting only employees’ portion for local government workers. The state funded accrued pension rights of both LG and state but with huge arrears of accrued pension liabilities.

Jigawa State is remitting pension contributions to selected Pension Fund Administrators, PFAs, but implementing a Contributory Defined Benefits Scheme, CDBS. It does not have group life insurance policy for its workers.

Ogun stopped remitting pension contributions with huge arrears of unremitted pension contributions. It has not commenced funding of the accrued rights or established Group Life Insurance policy.

Niger State stopped remitting pension contributions in 2015, and is not funding accrued rights. Rivers is remitting only employee portion of pension contributions. The state has a huge backlog of unremitted employer portion of pension contributions.

These are some of the disheartening snapshots of the states’ pension schemes for which we advocate stern measures to save the future of the workers who would not be able to fend for themselves soon after they leave service.

While commending the efforts of PENCOM, we advise the Federal Government to exert the political will that rescued the LGs from the financial stranglehold of the State Governors to rescue state pensioners from their plight.



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