PenCom: Only four states, FCT remitting pension contributions to workers under CPS

The National Pension Commission (PenCom) says only four states and the FCT have commenced the payment of pensions to employees under the contributory pension scheme (CPS).

They are Lagos, Osun, Kaduna, Delta, and the federal capital territory (FCT).

The agency disclosed in its latest report titled “Status of implementation of the CPS by states and the FCT for the first quarter of 2022”.

The CPS is an arrangement where both the employer and the employee make contributions towards the payment of the employee’s pension at retirement.

It is fully funded through the monthly pension contributions that are remitted into an employee’s retirement savings account (RSA) managed by the pension fund administrator (PFA).

According to PenCom’s report, 25 states have enacted laws to join the CPS.

Of these states, only 15 (Lagos, FCT, Osun, Kaduna, Delta, Ekiti, Ondo, Edo, Benue, Kebbi, Niger, Rivers, Ogun, Bayelsa, Kogi) have established pension bureaux/boards in line with the CPS.

Despite enacting the CPS laws, Anambra, Abia, Taraba, Imo, Sokoto, Adamawa, Ebonyi, Nasarawa, Enugu, and Oyo states are yet to establish a pension bureau to drive the implementation of the scheme.

The report added that eight states, namely Kwara, Plateau, Cross Rivers, Borno, Akwa Ibom, Bauchi, Katsina and Yobe, were still at the bill formation stage. It means that they are yet to enact a law on the CPS to guide the implementation of the scheme.

However, Jigawa, Kano, Gombe, and Zamfara states have opted to operate other pension schemes.

PenCom said it carried out sensitisation workshops, capacity-building programmes, and stakeholder engagement meetings during the quarter under review.

It said it met with representatives of the Ekiti State Pension Commission (ESPC) to discuss the challenges faced in the implementation of the CPS in the state.

The commission also said it made presentations at the pension management retreat organised by the FCT Area Councils Staff Pension Board (ACSPB) in Akwanga, Nasarawa state, adding that the presentations were on the CPS implementation challenges with emphasis on uncredited contributions.

“The commission engaged the government of Rivers state, expressing concern over the state’s inability to take steps to fully implement the CPS in the State, in view of the impending commencement of retirement of employees of the state under the CPS as from 1 June 2022,” it added.

“The commission also engaged the government of Ogun state on the persistent non-remittance of pension contributions into the State employees’ RSAs by the State, in view of the fact that employees of the State would start retiring under the CPS as from 1 July 2025.”