WorldStage Newsonline– The National Pension Commission (PenCom), has urged states and local governments to implement the Contributory Pension Scheme (CPS) for a pension-secure Nigeria.
This is coming as the commission commended Lagos, FCT, Osun, Kaduna, Ekiti, Edo, Ondo, Delta, Benue, Anambra, and Jigawa, for their exemplary implementation of the CPS as at December 2024.
According to the statement by the commission, these states have set the benchmark for sustainable pension administration by ensuring that retirees receive their entitlements promptly. They are consistently remitting both employer and employee pension contributions under the CPS, Jigawa State remits contributions under the Contributory Defined Benefits Scheme (CDBS).
The Pension Reform Act (PRA) 2014, in Section 2(1), stipulates that the CPS applies to all public sector employees across the Federal Capital Territory (FCT), states, local governments, and private sector.
The statement said the 1999 Constitution of the Federal Republic of Nigeria (as amended), state governments have the constitutional right to legislate on pension matters within their jurisdictions.
The commission said that State governments were required to domesticate the CPS by enacting appropriate pension laws within their states.
In August 2006, the National Council of States adopted the CPS for all states and local governments to support this adoption, PenCom developed a Model State Pension Law, enabling state governments to modify it according to their unique needs.
According to the statement, PenCom reviews draft state pension laws and guides states throughout the implementation process.
The commission said that many states were yet to implement the CPS.
” For a state to implement the CPS in full, the state is required to enact a law on CPS, establish a Pension Bureau, register its employees with Pension Fund Administrators (PFAs) and commence remittance of pension contributions.
” The state is also required to carry out actuarial valuation, commence funding of accrued pension rights, procure group life insurance for its employees, and open and fund a retirement benefits bond redemption fund account with the Central Bank of Nigeria (CBN) or PFA,” the statement said.
The commission said that some states had enacted laws to adopt the CPS but have not yet made significant strides towards implementation.
The states include Abia, Adamawa, Bauchi, Bayelsa, Ebonyi, Enugu, Gombe, Imo, Kano, Katsina, Kebbi, Kogi, Nasarawa, Niger, Ogun, Oyo, Rivers, Sokoto, Taraba, and Zamfara.
PenCom urges these states to accelerate their efforts toward full implementation of the CPS, by timely remittance of both employer and employee pension contributions.
The statement said by taking decisive action, these states can align with the pacesetters in ensuring a secure and sustainable retirement scheme for their workforce.
According to the statement, PenCom observes that Akwa Ibom, Borno, Kwara, Plateau, Cross River, and Yobe are yet to commence implementation of the CPS.
” PenCom strongly encourages these states to expedite the enactment of their CPS laws and take immediate steps toward full implementation to ensure a secure and sustainable pension system for their workforce.
The transition from the Defined Benefits Scheme (DBS) to the CPS at the state and local government levels is both a significant and inevitable step.
The scheme was designed to ensure that all retirees receive their benefits in a timely manner, providing a sustainable and secure retirement for all public sector employees.
The commission said that the CPS offers a long-term solution to the pension liabilities that many states currently face.
PenCom warned that failure to adopt the CPS would worsen pension debts, creating financial burdens for future administrations.
” By failing to address pension arrears, states are inadvertently creating a financial burden for future generations, as these liabilities will continue to grow.
” Adopting the CPS now will help states avoid these escalating costs and provide a more secure financial future for both retirees and taxpayers.
The commission reiterated its commitment to engaging with non-compliant states, offering technical assistance to aid their transition.
With pension security at stake, PenCom called on all states to act decisively to protect their workers’ financial futures, stressing that a sustainable and secure pension system is critical for economic stability.
PenCom reiterates its committed to the effective regulation and supervision of the pension industry.
