Recently, the National Pension Commission (PenCom) expressed its dismay over the unwillingness of states operating the Contributory Pension Scheme to remit pension contributions deducted from workers’ monthly remunerations. These funds are statutory deductions that ought to be paid to the respective Retirement Savings Accounts (RSAs) with the workers’ Pension Fund Administrators. According to the commission, over N3.4 billion worth of pension contributions were not credited into state employees’ RSAs as of May 31, 2019.
Available record indicates that Katsina, Sokoto, Benue, Adamawa, Borno, Gombe, Taraba, Benue, Kogi, Kwara, Nasarawa, Plateau, Ogun, Oyo, Abia, Ebonyi, Enugu, Imo, Akwa Ibom, Bayelsa, and Cross River states are alleged not to be remitting both employer and employee pension contributions. Some private organisations are also caught up in this web of non-remittance.
The Contributory Pension Scheme (CPS) came as a beacon of hope to pensioners and prospective retirees because of the expectations of a safe and secured retirement life. By the provisions of the Pension Reform Act, employer’s contributions of 10 per cent and employee contribution of eight per cent of the total monthly emolument of the worker, are to be warehoused in RSAs domiciled with Pension Fund Administrators (PFAs) as a safeguard for the workers’ retirement welfare.
Essentially, from its beginning in 2004 and amendments of the Pension Reform Act (PFA) in 2014, the Contributory Pension Scheme has contributed to the economy of the country by pooling over N8.9 trillion in pension asset. This money forms part of the capital being used in further boosting the nation’s economy.
Plausible as the scheme is, it is at the risk of being jeopardised owing to employers’ penchant for not remitting the deductions to pensioners’ RSAs. Therefore, the Nigerian worker is very concerned about the timely and complete remittance of his or her pension contributions as uncredited remittances, no doubt, deny them the investment income that ought to have accrued to them over time.
It is pertinent to note, in the opinion of this newspaper, that if a pension scheme fails to deliver on its promises of a safe and secured retirement future for pensioners, the retirees will ultimately bear the brunt. This, among other factors, explains the interest in the total and timely remittance of pension contributions. Perhaps, it was in appreciation of this fact that the law provides that remittances should be made within seven days of payment of salary.
However, it is lamentable that some state governments and most employers of labour in the private sector, often observe the law in the breach. Available records indicate that as at the time of writing this report, 24 states have enacted laws for the Contributory Pension Scheme (CPS) which provides for joint contribution between the employer and the employee.
We consider it a sad reality that since the implementation of the Pension Reform Act in 2004 by the National Pension Commission, 21 state governments have yet to remit pension deducted from workers’ pay thereby negating the noble objective of the Pension Reform Act.
We recall that before the pension reform, pensioners go through all sorts of difficulties and challenges trying to access their pension. Their plight and the uncertainty of life after work are seen largely as part of the factors that fuelled corruption in the civil service.
It is disturbing, in our view, that employers’ reluctance to remit contributions into workers’ RSA has the tendency to not only put the entire scheme, laudable as it is, in jeopardy, but to also encourage corruption and other economic crimes as workers will be forced to think of devising means of saving for life after work.
Curiously, the Labour Unions appear to be only interested in wage increase and other immediate benefits of service without taking a hard look and stand on the equally important issue of non-remittance of pension contribution. They have had cause to embark on strike at the slightest provocation but are silent on the issue of non-remittance.
Perhaps the time is ripe for the Nigerian Labour Congress and other unions to take a hard stand on the issue of non-remittance because it has to do with life after work which is a reality as far as an average worker is concerned.
As potential retirees, workers must accord equal importance to their pension contributions as they do to their salary since one is for the moment while the other is for a future date with all the uncertainties associated with it.
In response to this violation of a critical labour law, we are compelled to suggest that henceforth, failure by any employer to remit deductions to RSAs should attract appropriate sanctions.
Christine Lagarde Resigns As IMF MD
Christine Lagarde, the Managing Director, International Monetary Fund (IMF), has resigned, the IMF says. The Executive Board of the fund...
Court Remands Man In Prison Custody Over Car Theft In Osun
An Osun State Magistrates’ Court sitting in Ile-Ife on Tuesday remanded one Hammed Ajala, 37 in Ile-Ife prison custody over...
Lawmaker Assures Of NASS Support To Make Nigeria Safe
A member of the House of Representatives from Ekiti, Hon. Yemi Adaramodu has assured that the ninth National Assembly will...
Nigerian Students Get $7.5m In Scholarships From US Universities
About 303 Nigerian students have received no less than $7.5 million in full or partial scholarships from 225 American universities...
Court Freezes Firms’ Accounts Over Alleged N125m Fraud
Justice Nicholas Oweibo of the Federal High Court in Lagos on Tuesday placed a no debit order ordered on two...
Ekiti NGOs Hail Mrs. Fayemi On Gender Rights Protection
The coalition of the Non-Governmental Organisations (NGOs), in Ekiti State have lauded the first lady of Ekiti State, Erelu Bisi Fayemi...
Cuba Seeks Nigeria’s Support To End U.S Blockade
The Cuban government has urged Nigeria to throw its weight behind the country in its quest to pressure the United...
OPINION16 hours ago
Kogi 2019: Whither Governor Yahaya Bello (I)
COVER STORIES17 hours ago
Army Redeploys Lt Gen Adeosun, 32 Others In Major Shakeup
FEATURES17 hours ago
Dissecting Akpabio’s Many Battles
COVER STORIES17 hours ago
Mixed Reactions Trail OBJ’s Latest Missive To PMB
FEATURES17 hours ago
When Will Ondo APC Crisis Be Over?
BUSINESS16 hours ago
NERC Moves To Stop Arbitrary Estimated Billing
NEWS24 hours ago
‘Investigative, Digital Story-telling, Proper Response For Current Challenges’
COLUMNS16 hours ago
Edo Assembly Imbroglio, A Necessary Distraction