Workers Stall States’ Implementation Of Contributory Pension Scheme

Efforts by some state governors to pass the Contributory Pension Scheme (CPS) bills into law have been resisted by workers in the public sector.

This has largely contributed to the inability of 25 states of the federation to pass their bills and implement the CPS which the federal government introduced through the Pension Reform Act (PRA) of 2004.

Findings by LEADERSHIP Weekend across the country showed that six states are yet to enact the law, while 19 others which passed the legislation have not implemented it.

The complying states, which the National Pension Commission (PENCOM) confirmed in a recent advertorial, are Lagos, Kaduna, Ekiti, Edo, Ondo, Delta, Benue, Anambra, Jigawa, and Federal Capital Territory (FCT).

According to PENCOM, the states which domesticated the law but have not enforced it are Abia, Adamawa, Bauchi, Bayelsa, Ebonyi, Enugu, Gombe, Imo, Kano, Katsina, Kebbi, Kogi, Nasarawa, Niger, Ogun, Oyo, Rivers, Sokoto, Taraba and Zamfara.

Those defaulting are Akwa Ibom, Borno, Kwara, Plateau, Cross River and Yobe. These six states have not legislated on CPS at all.

Under the law, employees and employers jointly contribute to a Retirement Savings Account (RSA) for each worker to make the workers’ pensions more sustainable.

In separate interviews with LEADERSHIP Weekend, senior officials, trade unionists and some workers explained that they have yet to embrace the pension scheme.

It was learnt that in Kogi State, the CPS is yet to kick off as the labour unions had in September 2021 asked the state government to halt its implementation to allow for wider consultations.

The then chairman of the Senior Staff Association of Nigeria, Kogi State chapter, Comrade Akeji Aaron, had told the state government to jettison the rumoured implementation of the CPS and give attention to providing benefits that accrued to civil servants over the years that were yet to be enforced.

The Nigeria Labour Congress (NLC) had also cautioned the immediate past Governor Yahaya Bello against the implementation of the scheme.

The then NLC chairman, Comrade Onuh Edoka, now special adviser to Governor Ahmed Usman Ododo on Labour Matters, while opposing the implementation then, said the scheme had failed in other states which had adopted it.

Credible sources in the workers’ and government’s circles said the issue had not been revisited by the incumbent administration.

The situation is not entirely different in Kwara State as the government is yet to implement the pension scheme.

The chairman of NLC, Comrade Murtala Olayinka, however, appealed to the state government to expedite action on its implementation.

He said they were holding talks with the relevant government officials on the issue.

The commissioner for finance, Dr Hawa Nuru, could not be reached for comments on the issue.

However, a senior government official confided in LEADERSHIP Weekend that workers in the state “appear not to be keen on enrolment into the compulsory contributory pension scheme”.

In Plateau State, officials said the pension bill is pending before the state House of Assembly. Recently, the union of Plateau State-owned tertiary institutions disrupted proceedings at the Assembly over the non-passage of the bill.

The protesters, drawn from the six tertiary institutions, were led by their former chairman, Comrade Paul Dakogol.

However, civil servants in the state are skeptical about the new pension scheme and asked why the government would want to introduce it when federal staff in the scheme were having tales of woe to tell.

The commissioner for Information and Communication, Hon Joyce Ramnap, told our correspondent that the bill was yet to be passed into law.

According to her, it got to a stage during the 9th Assembly, but she could not explain why it was not passed into law.

“As it is right now, I can’t say anything about it because we were not in office during the 9th Assembly.  That is what I can say in respect of the implementation of CPS at the moment,” Ramnap said.

The Cross River State government is also yet to implement scheme

Speaking on the issue, the chairman of the Trade Union Congress (TUC), Comrade Monday Ogbodum, said organised labour, comprising the TUC, NLC and the Joint Negotiating Council, had objected to the implementation of the scheme and staged a protest at the Cross River State House Assembly to disrupt the process of signing the bill into law.

He stressed that even when the Assembly surreptitiously passed the bill at night, the governor had not been able to implement it, adding that the “bill is dead on arrival”.

LEADERSHIP Weekend learnt that the day the bill was to be heard, the labour union invaded the Assembly and stalled the process.

The lawmakers were said to have fixed another day and then returned at night to pass it.

“There is no hope of implementing the scheme as far as we are concerned,” Ogbodun declared.

The chief press secretary to the governor, Mr. Nsa Gill, said the governor was eager to implement the scheme, but that the organised labour frustrated the move.

He said because the administration of Governor Bassey Otu believes so much in the people, he succumbed to the pressure of the labour leaders to halt the implementation of the scheme.

Gill said the governor would implement the scheme once its managers are able to address the workers’ fears.

In Bauchi State, the newly appointed executive secretary of the State Pension Commission, Ibrahim Inuwa, said the state was one of the 18 states in the federation that passed the Act in 2014.

He said that Governor Bala Abdulkadir Mohammed established the commission based on the law allowing states and federal government parastatals to do so in accordance with the Pension Reform Act (PRA) 2014.

In an interview with LEADERSHIP Weekend in Bauchi, Inuwa recalled that the law was first established in 2004 and amended in 2014 due to changes in the global market.

Inuwa said 18 of the 28 states that enacted the law were at various levels of implementation.

The executive secretary said the state was poised to clear the lingering issue of pension liabilities at the MDAs and Local Government Councils.

“So, in reality the contributory pension scheme that was established by states is going to take care of all the issues that have been going around regarding the accrued liabilities. As I am talking to you, we have some issues with regard to the defined benefits.

“There are two systems here: the contributory pension scheme and the defined benefits scheme. At the same time, there is another scheme that is still part of the hybrid scheme like that of the Jigawa State model. But, the one we are going to use in Bauchi is the one adopted by the federal government, that is, the contributory pension scheme,” he said.

For Gombe State, civil servants seem not bothered by the non-implementation of the Contributory Pension Scheme law in the state.

A civil servant, Adamu Bello, said the prompt payment of pensions by the state government makes them uninterested by the non-implementation of the contributory pension.

“After retirement, civil servants begin to receive their pensions the following month, a system I think is more efficient than the contributory scheme coordinated by private companies,” he said.

Bello said salaries in the state are low and further deductions would reduce their take-home pay, potentially causing more hardships for them.

But he noted that while pensions are paid as at when due, gratuities payment to retired civil servants is delayed in the state.

Another employee of the state, Samson Darius, said the CPS in Gombe State had been stalled since the era of former Governor Ibrahim Dankwambo’s administration.

He said the main obstacle is resistance from pressure groups due to ongoing trade disputes over remuneration.

“Civil servants in the state already feel underpaid, making it difficult to implement the scheme, which would require them to set aside a portion of their meagre salaries,” he pointed out.

Others expressed concern over the contributory pension scheme’s hitches, citing delays in processing payments and the risk of the federal government borrowing from pension funds contributed by civil servants.

Borno State head of service, Muhammad Aminu Ghuluze, said the government had not commenced the implementation of CPS because it is yet to domesticate the Act so that the House of Assembly can enact it as law.

Ghuluze, however, said the present administration of Governor Babagana Zulum was collaborating with the stakeholders towards its domestication.

When contacted by our correspondent on the workers’ stance, the NLC chairman, Comrade Yusuf Inuwa, said the body had been discussing the matter with the state government.

He, however, said that labour advised Governor Zulum to hold on with domestication of the CPS until the workers were educated about what the scheme is all about and its implications, positively or negatively.

In Enugu State, the TUC chairman, Ben Asogwa, said labour was still deliberating with the government on some conditions to be met before the implementation.

Asogwa added that one of the areas they are discussing was the issue of accrued benefits.

He further disclosed that they also wanted the government to establish the state pension board to avoid the mistakes that other states made when they hastily jumped into the implementation.

When contacted, an aide to Governor Peter Mbah, who did not want his name mentioned, told our correspondent that his principal was expediting action on the issues raised, adding that he had started paying the accrued benefits.

In Benue State, the chairman of the Nigeria Union of Pensioners (NUP), Comrade Mike Vembeh, said although the state keyed into the Contributory Pension Scheme over five years ago with a constituted board called Benue State Contributory Pension Board, it is yet to implement the scheme.

Comrade Vembeh who spoke to our correspondent through a telephone interview explained that when the Governor Hycinth Alia-led administration came on board and discovered that the tenure of the board had elapsed, he dissolved the board and is yet to constitute a new board, so for now the permanent secretary is the one overseeing the activities of the Scheme.

According to him, “Monies are being deducted monthly for the scheme because pensioners are to contribute 8 per cent, while the state government will contribute 10 per cent, but for a while now, only pensioners are contributing, but we are waiting for the constitution of the board before we will know what to say about it.

“As the state NUP chairman, we are calling on the government to expedite action on the constitution of the board and as well commence its contribution of the 10 per cent and implement the Scheme.

“We have also written memos calling to the government to do its part and implement the Scheme and we believe that as a talk-and-do government, we will soon see the constitution of the Board and other things will also follow,” he said.

Efforts to hear from the state government failed as the chief press secretary to the governor of Benue State Tērsoo Kula were futile as his telephone numbers were not connecting and he did not reply to the message sent to him.

Bayelsa State has not fully implemented the Compulsory Contributory Pension Scheme as mandated by the Pension Reform Act of 2014. While the state enacted its own Pension Law in 2009, the implementation of the contributory pension scheme has been inconsistent.

It was gathered that a major issue is the non-remittance of deductions from workers’ salaries, as well as the state government’s failure to contribute its counterpart funding.

The Organised labour and pensioners have repeatedly raised concerns over the state’s pension management, particularly regarding unpaid retirement benefits and gratuities.

Bayelsa State still operates largely under the old Defined Benefit Scheme (DBS), with pension payments dependent on government allocations rather than a structured contributory pension system. However, there have been discussions on improving pension administration in the state, but full implementation remains a challenge.

The Bayelsa State chairman of NLC, Comrade Simon Barnabas, raised concerns over the implementation of the CPS policy in Bayelsa State, questioning whether the state government would faithfully execute it.

He emphasised that similar schemes at the federal level had faced challenges due to unfulfilled agreements and expressed doubt about whether Bayelsa’s version would fare any better.

He noted that such policies should not be hastily adopted without a thorough engagement with the labour movement.

He said, “It is not a decision that should be taken by an individual rather the labour movement will discuss it, look at it and see how we engage the government, borrowing a leaf at what is happening at the national level, not just going into it, because if we go into it, there may be issues.

“If the retirement emolument alone is a problem, is it this one that will not attract issues? There are so many questions to ask; it goes far beyond agreeing on a thing. The implementation process will consider all that are being agreed upon? I think it is not just me to talk about it.”

When contacted after several attempts, the chairman Bayelsa State Pension Board, Mr. Victor Akenge, said, “We are yet to get enrolled yet.”