Pension Palaver

•We must work towards ensuring the success of the new scheme

It ought to be deeply troubling that some states have neither signed on nor embraced the spirit of one important piece of legislation designed to take stress out of the post-service life of the Nigerian worker. We refer to the Pension Reform Act 2004 signed into law by the administration of former President Olusegun Obasanjo.

Twelve years after, the implementation across the federation remains largely a mixed grill. According to a Nigerian Pensions Commission (PenCom) report, whereas 26 states have enacted their Pension Reform Law, only 10 have given it practical effect by remitting the funds into the Retirement Savings Accounts (RSA) of their employees.

Among the lot are Lagos, Ogun, Kaduna, Niger, Delta, Osun, Rivers and Anambra states; these states are said to have commenced remittance of contributions to six Pension Funds Administrators (PFAs) as well as funded their accrued rights. Zamfara State is said to have commenced remittance of contributions to the PFAs but is yet to fund its accrued rights. Whereas Jigawa State is said to have transferred its pension assets to PFAs for management, Kano is yet to do same. As for Imo State, it is yet to commence remittance of pension contributions, although Imo State University currently implements the Contributory Pension Scheme but is however not funding its accrued rights yet.

The rest of the states – 10 in all, apparently have yet no need for it, hence their being in no hurry to sign on to the new scheme.

It is unfortunate that several states have continued to dither in the implementation of that important law.

As imperfect as the new pension law may be– and no law is perfect – the benefits obviously far outweigh whatever benefits the old scheme assumes; the same way that pain (if any) is far more tolerable than the scheme that has come to be associated with tears and needless deaths of our retirees.

A direct answer to the problem of unbearable burden of pension payment and lack of sustainability, employers under the new pension scheme are mandated to deduct a fixed percentage from employees’ wages to which is then added the contribution from the employer, which is subsequently remitted to the PFA for the benefit of the employee at retirement. This requirement is what is proving to be the albatross on the new scheme.

Is it that the affected states have yet to appreciate the succour that the scheme has brought to the workers, most of whom, before its coming, have had to endure the agony of endless verifications in order to access their pensions?

How about the scheme’s potential to boost the pool of investible funds so sorely needed to drive economic and infrastructural development of the country at this time?

Or, is it another manifestation of the so-called Nigerian factor of the legendary lack of will to drive well-conceived policies through; the absence of institutional discipline which ensures the floundering of policies and plans?

Whatever the case is, the current situation is certainly inexcusable. It is worth reminding the affected state governments as indeed other defaulting employers that the new scheme came into being precisely because they allowed unbridled corruption and fiscal indiscipline to cripple the former scheme. Having killed the old, we cannot now allow the same virus of indiscipline to kill the new scheme.

We urge the Nigeria Labour Congress as well as the relevant industrial unions to take up the gauntlet to ensure that the scheme is not allowed to run into troubled waters. Although the signs at the moment are troubling, particularly with 27 states currently in arrears of wages/salaries by several months, under no condition should the workers’ financial future be sacrificed on the altar of current challenges. As for the 10 states yet to sign on to the new scheme, there should be a way to get them to do so without further delay.