Having fully commenced the implementation of the Contributory Pension Scheme (CPS), 11 states have kick-started pension remittance into the Retirement Saving Accounts (RSAs) of their workers, LEADERSHIP has learnt.
This includes the remittances of both the employees and employers portion of the monthly pension contribution into the RSAs of civil servants across the concerned states. The states are: Lagos, Osun, Ogun, Ondo, Kaduna, Delta, Anambra, Jigawa, FCT, Edo and Ekiti states.
While the states are still using the 15 per cent old monthly contribution shared at 7.5 per cent each between an employee and an employer, LEADERSHIP learnt that none of the states across the country have commenced the new 18 per cent monthly contribution of which an employer contributes 10 per cent while an employee contributes eight per cent, as prescribed in the Pension Reforms Act (PRA) 2014.
Moreover, Zamfara, Kebbi and Rivers states are only remitting employee’s portion while Imo, Benue, Kwara, Bauchi and Niger states are states with remittances from self-funded agencies. Thirteen states, comprising of Adamawa, Bayelsa, Ebonyi, Enugu, Gombe, Imo, Kano, Kogi, Nasarawa, Oyo, Sokoto, Taraba and Abia States have enacted laws, but are yet to commence remittance.
However, Bauchi, Benue, Borno, Cross-Rivers, Katsina, Kwara, Plateau and Akwa-Ibom states are at bill stage in their respective state houses of assembly. Yobe remains the only state that is yet to commence any process towards the implementation of the Contributory Pension Scheme (CPS).
Speaking at a workshop organised by the National Pension Commission (PenCom) for journalists in Uyo, Akwa-Ibom state, at the weekend, company’s secretary/legal Adviser, PenCom, Mr. Mohammad Sanni Mohammad, said some states have enacted the law but are having remittance issues, while 16 states have not enacted law and appropriation not made.
Stating that PenCom cannot prosecute the defaulting states but can only persuade, he said, the federal system of government being operating in the country has limited the commission’s power to prosecute states that are non-compliant to the CPS. For the CPS to become effective in states, he said, the states must first of all, domesticate it in their respective state by-laws, after which necessary appropriation must be made to fully key into the new pension scheme.
He pointed out that some states are having challenges to pay salaries of their workers, hence, defaulting in the prompt pension remittance of their workers, adding that, the commission is doing everything possible to persuade more states to join the new pension scheme.
However, the new president, Pension Fund Operators of Nigeria (PenOp), Mrs. Aderonke Adedeji, urged workers both in the public and private sectors, to mount pressure on their employers to remit their pension as and when due, noting that, until workers fight for themselves, dubious employers will continue to evade pension remittance of their employees.
Earlier, Mr. Ibrahim Shehu Kangiwa, of the Investment Supervision Department of PenCom, announced that Multi-fund Structure of RSA Funds will commence July 1, 2018, having amended and released the Regulation on Investment of Pension Fund Assets to Pension Fund Operators on April 18, 2017.
This new provisions in the regulation, he stressed, took immediate effect, except the Implementation of Multi-Fund Structure for RSA Funds which would commence later in the year. The implementation of the RSA Multi-Fund Structure, he said, was delayed to allow adequate public sensitisation and education, noting that, the main objective of the RSA Multi-Fund Investment structure, is to resolve the challenge of Asset-Liability risk management experienced by Pension Funds.
This, he pointed out, would be achieved by better aligning the risk and return expectations of Contributors, better matching of pension assets and liabilities and diversification of pension fund portfolios, as minimum limits are set for aggregate investments in variable income securities, for each Fund.
To implement this multi-fund, he said, Pension Fund Administrators (PFAs) would be required to provide contributors with information on the benefits and risks of the various Funds, prior to approving any change, the Commission and PFAs would embark on Public Enlightenment / Sensitization Campaign prior to commencement date.
“PFAs are currently carrying out the necessary in-house system upgrades and processes to ensure a robust IT system for the Multi-Fund. The introduction of the Multi-Fund investment structure for RSA Funds would address the varying risk appetite of Contributors, as the different Funds are tailored to fit the ages and risk profiles of Contributors,” he stated.
To him, expanding the scope of allowable investment instruments and Fund classes available to Contributors would also improve returns on pension funds, as minimal limits have been set for variable income instruments which generally yield higher returns over a given period.
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