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South-west Leads Other Zones in Contributory Pension Compliance

The South-west geo-political zone of Nigeria, comprising Ekiti, Lagos, Ogun, Oyo, Ondo and Osun states, is said to be leading other political zones in the country when it comes to complying with provisions of the Pension Reform Act, 2004 and contributory pension.
Comparing the performance of states in the six geo-political zones of the country in this regard, it is very clear that states in the South-west well out-performed their counterparts in the other zones.
 
According to the National Pension Commission (PenCom), all of the states in the zone have enacted their own versions of the pension reform law to enable them establish a contributory pension scheme for civil servants at both states and Local Government levels respectively.
 
The pension regulator also said a greater number of all the states in the zone have started deducting pension contributions from their workers’ salaries monthly and remitting same into their Retirement Savings Accounts (RSA) domiciled with their preferred Pension Fund Administrator (PFA).
 
THISDAY investigations confirmed that Lagos State has remained special in this regard, being the first state to embrace contributory pension. The state enacted a law that enabled it to start implementing the scheme in 2007 prompting PenCom to locate its zonal office within the state.
 
“Indeed, the choice of Lagos State to host our South-west zonal office stemmed not only from its pre-eminent position as the economic nerve centre of the country but was also justified by its record of being one of the pioneers in implementation of the CPS, having enacted its law in 2007,” the acting Director General of PenCom, Mrs. Chinelo Anohu-Amazu, said.
 
Lagos State is fully compliant with 45,730 employees registered and pension contributions remittance of N46.50 billion as at July, 2013. It also issued retirement benefit bonds worth N18.9 billion to its retirees and these bonds have been fully redeemed and proceeds paid into the RSAs of the beneficiaries just as another 2,242 employees from the state have retired under the scheme as at August, 2013.
 
Osun State in the same vein has made significant progress in compliance with contributory pension. It enacted its enabling law as far back as 2009 and so far registered 45,106 employees under the scheme. It also remitted N4.15 billion as pension contributions while N1.90 billion has so far been remitted into the Retirement Benefits Bond Redemption Fund Account of retirees.
 
However, the state is yet to renew the group life insurance policy for its employees in 2013 and yet to carry out an actuarial valuation to determine accrued pension rights of its employees.
 
 
In the case of Ogun State, it embraced contributory pension and enacted the enabling law in 2007. It has so far registered 24,902 employees under the scheme and remitted N10.90 billion as pension contributions. It also paid another N3 billion into the Retirement Benefits Bond Redemption Fund account held at the Central Bank of Nigeria (CBN) for the benefits of its retirees. Unfortunately, Ogun State is yet to put in place a group life insurance for its employees.
 
Ekiti State as well enacted the enabling law on the CPS in January, 2011 and registered 37,676 employees under the scheme. The state has conducted an actuarial valuation to determine its outstanding pension liabilities under the rested defined benefit scheme and has in place a group life insurance for its employees. However, it is yet to commence remittance of pension contributions into employees RSAs with the PFAs.
Oyo State enacted the enabling law in January, 2010 but it is yet to commence the full implementation of the CPS.
 
Ondo State has only drafted a bill on contributory pension, a copy of which had been reviewed by the commission and comments duly forwarded to the State.
 
Notwithstanding the zone’s leading role, Anohu-Amazu appealed to the states in the Zone that have not completed necessary processes for full implementation of the CPS to renew their commitment and fast track action on all outstanding issues in order to avail their employees of its many benefits. She said the commission’s zonal office was positioned to help states comply fully with provisions of the pension law.
 
Meanwhile, the South-east Zone is yet to adopt or implement contributory pension CPS, since none of the five states in the zone is fully compliant with the pension law. Three states in the zone, Abia, Ebonyi and Enugu, have not enacted the law on the CPS while Imo State, which enacted its enabling law as far back as 2008, suspended implementation indefinitely.
 
Anambra State only recently enacted its enabling law. It is expected that the state would soon set up the administrative structures, appoint PFAs and register its employees.
 
 
Also, the state is yet to commence deduction and remittance of pension contributions and yet to conduct an actuarial valuation to determine accrued pension liabilities and has not started funding the Retirement Benefit Bond Redemption Account resident at the CBN. “Generally, the level of implementation in the South East zone raises concern when viewed against the fact that the decision to adopt the CPS was taken by the National Council of States at its meeting of July, 2006,” PenCom noted.
Only Niger State is fully compliant with the contributory pension out of all the States in the North-Central Zone.
 
The Pension Reform Act, 2004 was meant to address old age poverty and the sufferings of retirees while accessing their monthly pension. The law sought to ensure that every person who has worked in either the public or private sector get their pension as and when due; establish a uniform set of rules and regulations for the administration and payment of retirement benefits in both the public and private sectors, among other things.

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