As of June 2023, only six states and the Federal Capital Territory (FCT) have fully implemented the Contributory Pension Scheme, according to a report from the National Pension Commission (PenCom). The report has raised concerns among workers and retirees, with some describing retirement as a “death sentence” due to non-compliance.
The states fully implementing the scheme, apart from the FCT, are Lagos, Osun, Kaduna, Ekiti, Edo, and Ondo. A breakdown of the report reveals that Delta State is substantially implementing the scheme, while Anambra, Benue, and Kebbi are partially implementing it. Rivers, Ogun, and Niger states have extended their transition period to the Contributory Pension Scheme, as stated by PenCom.
However, a significant number of states have not yet fully joined the scheme. Figures from PenCom’s second-quarter report for 2023 show that while some states are at various stages of compliance, many continue to operate under the old pension scheme known as the Defined Benefits Scheme (DBS).
Under the Contributory Pension Scheme (CPS), both employers and employees contribute percentages of monthly emoluments into Retirement Savings Accounts. In contrast, the DBS relies on government funding to provide stipends to retirees.
The situation has sparked criticism from organized labor and pension union members, who accuse state governments of neglecting the welfare of retirees while offering generous pensions to former governors and deputy governors.
Ivor Takor, the Director of the Center for Pension Rights Advocacy, expressed concern about the lack of pension laws in place to protect the rights of civil servants in some states. He emphasized that some states with pension laws were not fully implementing them and pointed out that pension arrears were accumulating.
Concerns over states’ finances have grown, as many have faced revenue shortfalls and financial challenges, potentially hindering their ability to meet pension obligations.
Organized labor has condemned the defaulting states, with Benson Upah from the Nigeria Labor Congress calling it immoral and demanding sanctions under the PENCOM Act for defaulting remittances.
In response, workers in various states expressed their dissatisfaction with the situation, with some retirees living in poverty and waiting for long-overdue pension payments.
The pension issue remains a contentious one in Nigeria, and the call for comprehensive reform in pension administration and enforcement continues to gain momentum. The challenges faced by retirees underscore the urgency of addressing these issues to ensure the financial well-being of those who have served the nation.
Stay tuned for further developments in this ongoing issue.