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Contributory Pension Scheme attracts 6.74 million workers

By on November 12, 2015

Workers who have subscribed to the Contributory Pension Scheme have risen to 6.74 million in the past 11 years, investigation has revealed.

Data made available to our correspondent on Tuesday by the National Pension Commission showed that the number of contributors with Retirement Savings Accounts rose from 5.78 million to 6.26 million between 2013 and 2014, and 6.74 million by the third quarter of this year.

According to PenCom, the number of employees who had opened their individual RSAs rose to 4.41 million, 4.82 million and 5.27 million by the end of 2010, 2011 and 2012, respectively.

In the 2006, 2007, 2008 and 2009 financial periods, the total contributors under the CPS were 1.31 million, 2.78 million, 3.46 million and 4.01 million in that order.

The Director-General, PenCom, Mrs. Chinelo Anohu-Amazu, said the commission had continued to introduce measures to make employers comply with the Pension Reform Act, 2014.

According to her, the commission is in the process of introducing the CPS to the informal sector.

Anohu-Amazu said PenCom had commenced a nationwide dialogue with self-employed persons and workers in the informal sector ahead of the commencement of the micro pension scheme in the country.

The PenCom boss said the commission was introducing the micro pension as a financial programme for the provision of pension services to self-employed persons and informal sector workers.

According to her, the government hopes to bring at least 20 million informal sector workers and self-employed persons into the scheme in the next four years.

She also said that necessary arrangements were being put in place to ensure the smooth commencement of the scheme later this year, adding that a key feature of the CPS was the institutionalisation of risk-based regulation as a means of engendering the long-term sustainability of the pension industry.

The PenCom boss said the old Defined Benefits System had a pension deficit of about N2tn, but that the new CPS, which was started in 2004, had been able to raise over N5.3tn.

According to her, the operators are deliberating on the most appropriate strategies for leveraging pension funds to finance the execution of critical infrastructure projects.

“Infrastructure development undoubtedly remains a key enabler of sustainable development in Africa and the current rapid increase in the size of pension funds available in the continent provides a rare opportunity for multi-sectoral collaboration in bridging Africa’s infrastructure deficit,” Anohu-Amazu said.

The Executive Secretary, Pension Fund Operators Association of Nigeria, Ms. Susan Oranye, said it was important for employers to embrace the CPS so as to enable their workers to enjoy the benefits provided by the PRA 2014.

Oranye noted that the PRA 2014 was enacted to ensure that workers had comfortable lifestyles when working and at retirement.

According to her, this objective can only be achieved when employers enrol their workers on the scheme.

The Act mandates employers with at least three workers to register them with a Pension Fund Administrator.

Under the law, employers are to contribute 12 per cent and deduct eight per cent of the employees’ monthly emolument, which must be regularly remitted to the workers RSAs.