States and Contributory Pension Scheme(CPS)
Unless something is urgently done, indications are that the implementation of the Pension Reform Act (PRA) 2014, may soon hit the rocks following the unwillingness of some state governments to pay up their contributions. According to sources, states such as Cross Rivers, Osun, Kebbi, Ondo, Akwa Ibom, Ekiti and Niger are no longer contributing to the scheme, even as Imo, Sokoto, Lagos, Abia, Rivers, Bauchi, Edo and Plateau states are now stalling on its implementation.
The situation is threatened by the fact that deductions from workers salaries are no more remitted due to the financial constraints facing some states, even as many had made no contributions since the inception of the old Pension Reform Act, 2004. It would be recalled that the PRA makes it mandatory for employers to contribute 7.5 per cent of the workers monthly emolument into their Retirement Saving Accounts (RSA), while the workers will contribute the same. The history of the Nigerian Pensions administration dates back to the 1950s. The  Pension Reforms Act of 2004  brought into limelight, the new scheme, defined as contributory scheme unlike the old one that is defined as benefits.
For that, the new scheme is seen as better than the old one, since it is expected to help remedy the deficiencies and inadequacies prevalent in the old one. It is a fact that the contributory pension scheme is aimed at helping people save and plan for their retirement to avoid old age poverty and dependency.
More so, the scheme was to address the huge unsustainable pension deficit estimated at about two trillion naira, which characterised the former Pay-As-You-Go (PAYG) Pension Scheme.
Moreover, the contributory pension scheme is expected to have multiplier effect on workers attitude towards retirement, commitment to duty, and labour retention as well as attitude towards corruption especially in the civil or public service. This is because the uncertainty of receiving pension and gratuity after retirement was largely responsible for high labour turnover in the civil service. Before now, the provoking thought of facing life after retirement creates psychological and emotional stress among workers, especially those approaching retirement age.
While retirement remains luxury in developed countries, in Nigeria workers are always afraid of financial insecurity after retirement. Sadly, workers who are in the payroll of government cannot fend for them not to talk of when they are retired. We are therefore scandalised by the refusal of some state governments to withhold their own part of the contribution.
The defaulting states should not be allowed to hold the pension agency to ransom. It is sad that while top government functionaries are enjoying munificent benefits and emoluments irrespective of the state of their states’ finances, those of the workers are being sacrificed on the altar of expediency. We are aware that the PRA makes room for sanctions by empowering the National Pension Commission to institute criminal proceedings against employers for persistent refusal to remit pension contributions subject to the fiat of the Attorney General of the Federation. We are therefore advocating that the agency explore this legal option.
