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More state workers to join Contributory Pension Scheme

By on November 10, 2014

More state and local governments’ employees will soon be enrolled on the Contributory Pension Scheme, the National Pension Commission has said.

The Director-General, PenCom, Mrs. Chinelo Anohu-Amahu, said before the enactment of the Pension Reform Act 2014, some state governments, particularly in the South-West, had established the CPS and were at various stages of its implementation.

“However, the PRA 2014 has taken state and local governments’ participation in the CPS to the next level by express legislative statement on the coverage of employees of state and local governments,” she said.

Anohu-Amahu urged those that had yet to adopt or implement the CPS to do so in order to their employees of the numerous benefits of the scheme.

The PenCom boss said it had established functional offices in the six geo-political zones of the federation and was now strategically positioned to offer the needed technical assistance to state and local governments.

She disclosed that within a decade of the pension reform and the implementation of the CPS, modest achievements were recorded by PenCom.

According to her, the payment of pension under the CPS has been prompt and consistent since 2007.

“From a story of about N2tn in pension deficit under the defunct Defined Benefits Scheme as of 2004, the CPS has accumulated a large pool of investible funds of over N4.5tn pension assets as of June 2014,” she said.

The director-general said more than 6.2 million contributors had been registered under the CPS since inception.

Recently, she recalled that PenCom hosted the world pension summit, the Africa special in Abuja.

She said the summit did not only provide a platform for exchange of ideas on global best practices in pension administration but also showcased the achievements of the CPS in Nigeria in the last decade.

Anohu-Amazu said the PRA 2014 re-enacted the provisions of the repealed 2004 Act, which included the establishment of the CPS with PenCom as the sole regulator and supervisor of pension matters in Nigeria.

She gave other new developments in the PRA 2014 as a wider coverage for private sector employees and an upward review of the minimum pension contribution.

“The PRA 2014 has also reviewed upwards the sanctions and penalties against infractions of the provisions of the Act. The application of the CPS by state and local governments has also received a boost under the PRA 2014, by setting a standard which state governments are required to comply with for the benefit of their respective employees,” she said.

She said the 2014 Act had also made provisions for voluntary participation in the CPS, thereby paving the way for the coverage of the informal sector.

According to her, the PRA 2014 has made provision for contributors seeking to own their homes to use part of the funds in their Retirement Savings Accounts as equity contribution for mortgage.

“It is our expectation that when it is eventually implemented, this development would assist in bridging the housing deficit in Nigeria,” she said.

 

[Punch]