Don’t drag pension system to disrepute, experts task Nigerian Govt

Experts in pension matters have called on governments at all levels in Nigeria to urgently device means to pay up pension accrued rights so that the current pension scheme is not dragged into disrepute.

The Federal Government’s inability to remit pension contributions in the last 11 months, has heightened apprehension amongst the public who do not want a return to the ugly period that led to the introduction of the Contributory Pension Scheme (CPS).

The Daily Times also gathered that some state governments have outstanding remittances dating back over two years.

Olufemi Sobanjo, said that the country cannot afford to destroy the current pension arrangement – Contributory Pension Scheme (CPS), “because, we have had a terrible experience with government managing pensions.”

Also, Eguarekhide Longe, Chairman, Pension Fund Operators Association of Nigeria (PenOp) said compliance with regard to remittances of pension contributions from the Public Sector on both the Federal and State levels have lagged notably, stressing that whilst remittances from the Federal Government through the National Pension Commission (PenCom) were last received for September 2015, some states have outstanding remittances dating back over two years.

On its part, National Pension Commission (PenCom) said from 2014 to date, there has been a decline in budgetary provision in funding the Retirement Benefit Bonds Redemption Fund (RBBF) account and the remittance of monthly contribution.

The pension regulator added that sum of N20.07 billion is required to pay all outstanding accrued benefits for deceased and mandatory retirees of the Federal Government for the periods October to December 2015 and the sum of N79.16 billion has been computed as the arrears of 15 per cent pension increase owed to 79,961 Federal Government retirees under the Contributory Pension Scheme (CPS) as at December, 2014.

PenCom also noted that N50.20 billion was provided for the 2016 FGN Budgetary Appropriation for the Retirement Benefits Bond Redemption Fund (RBBRF) Account presented to the National Assembly, compared to the Commission’s projection of N91.91 Billion, resulting in a shortfall of N41.71 Billion.

According to PenCom, the Federal Government is also yet to commence the implementation of the revised 18 per cent minimum pension contributions for its employees as stipulated under Section 4 of the PRA 2014.

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PenCom said from the inception of the pension reform in 2004, the Federal Government had been religiously implementing the Contributory Pension Scheme by payment of monthly contributions of its employees in a dedicated account in the Central Bank of Nigeria, the Contributory Pension Account.

It noted that the Federal Government was equally making payment of five per cent of its monthly wage bill into the Retirement Benefits Bond Redemption Fund Account for the payment of the accrued pension rights of its employees who had worked under the old Defined Benefits Scheme and transited to the CPS, until the recent financial crisis, which had hindered its obligations.