‘Only six states have fully adopted new pension scheme’
The Pension Fund Operators Association of Nigeria (PenOp) has clarified that only six out of the 36 states in the federation have fully adopted the Contributory Pension Scheme (CPS).
Misbahu Yola, Managing Director, Legacy Pension Managers Limited listed the states that are in full compliance having enacted their pension law and commenced contributions as Lagos, Ogun, Delta, Kaduna, Jigawa, and Niger.
He said while 12 states have passed their own pension law, only six have fully adopted the scheme by getting their employees to open retirement savings account and ensuring the both employer and employees’ contributions are remitted.
This is contrary to what the public has been made to believe that 35 states were already implementing the scheme.
The National Pension Commission (PenCom) had informed that out of the 35 states that have embraced the scheme, eight States are in full compliance while 13 States are in partial compliance. The remaining 14 states are at various levels of enacting their own CPS laws.
Specifically, PenCom listed Lagos, Ogun, Delta, Kaduna, Jigawa, Niger, Osun, and Zamfara as States that are in full compliance, while the 15 States that are in partial compliance having enacted their pension law but yet to start contributions are Kogi, Ekiti, Bayelsa, Kebbi, Taraba, Imo, Kano, Oyo, Edo, Rivers, Sokoto, Akwa-Ibom, and Nasarawa.
The remaining 14 states claiming they were in the process of enacting their pension law are Anambra, Enugu, Gombe, Ondo, Abia, Plateau, Bauchi, Katsina, Benue, Borno, Yobe, Cross River, Kwara and Ebonyi.
Only Adamawa State out of the 36 states of the Federation was said to have not taken any step to implement the CPS.
This development is taking place in spite of the fact that the National Council of States had adopted the CPS for the entire nation since July 2006.
The Pension Reform Act was signed into law in June 2004 ushering in a Contributory Pension Scheme that is fully funded, privately managed and based on individual accounts for both the public and private sector employees in the country.
As the Pension Act does not cover employees at the state and local government levels, PenCom drafted a pension law called the Pension Reform Law 2005 for state governments to enable them adopt the scheme.
PenCom also issued the framework for the supervision of states and local governments’ pension schemes, which sets out the implementation processes and supervisory machinery to be adopted in ensuring effective and smooth operations of the pension schemes at the State and Local Government levels.