Contributory Pension Scheme: Commendable progress but more needs to be done

In June 2021, President Muhammadu Buhari ordered the payment of all outstanding pension liabilities under the Contributory Pension Scheme (CPS). The announcement specifically stated that the accrued pension rights for verified and enrolled retirees of treasury-funded Federal Ministries, Departments and Agencies (MDAs) who were yet to receive their retirement benefits, as well as the death benefits claims due to beneficiaries of the deceased employees of the same institutions would be paid.

This news will surely gladden the hearts of many retirees who have laboured for long to get their inalienable rights. Therefore, this announcement is a welcome development. While this is highly commendable, the only way to show respect to Nigerian retirees is by having a system that releases their monthly payments to them as a when due.

The payment of the retirement benefits of the civil servants in Nigeria has undergone a lot of improvement in recent times, from the old system which was plagued with maladministration, corruption, ghost retirees, among others. These badly affected the system where the ideal beneficiaries could not get their entitlements at the appropriate time. The enrolment of these retirees, until recently, had ended with most of our senior citizens either had to stay in scorching sunlight for hours, or some would collapse during the lengthy validation processes. In some instances, the beneficiaries would have died before the verification processes were completed.

The implementation of the contributory pension scheme also involves the sub-national governments in Nigeria, which means all the thirty-six states and the Federal Capital Territory (FCT) Abuja should be involved

Notwithstanding, there are still more grounds to be covered to improve the efficiency of the pension system. One of these areas is the periodic capturing and revalidation of biometric data of retirees, which should be improved upon. In other words, much more has to be done for a segment of the Nigerian society who had invested their skills, energy and expertise for the growth of the nation only not to be well-taken care of in their old age. The time has come for the adoption of the appropriate modern technology where the enrolees are the retirees and verification could be done online without having to go to a particular centre in a state to do it.

It should be noted that the implementation of the contributory pension scheme also involves the sub-national governments in Nigeria, which means all the thirty-six states and the Federal Capital Territory (FCT) Abuja should be involved. Available records show that some state governments in Nigeria have complied why some have not. According to the available report, only Lagos and Abuja have fully complied with the contributory pension scheme.

The non-compliance of a large number of state governments has pitched them against labour unions in some states. On a number of occasions, labour unions in some states have picketed the executive arms for denying employees of their future wealth.

In a recent nationwide survey carried out by THEWILL an online news platform, it was discovered that 63 per cent of the contributors are unhappy with the scheme. The survey which lasted three months from April to June 2021 employed face-to-face interviews, telephone conversations, email messages, telegram channels and other social media platforms to reach out to the respondents.

Focusing on the major cities/states in Nigeria such as Lagos in South West; Port Harcourt, Rivers State in South-South; Owerri, Imo State in South-East; Kaduna in North West; Bauchi in North East and the Federal Capital Territory, Abuja, a representative sample size of 3,540 respondents spilt into 67 per cent women and 33 per cent men listed the source of their dissatisfaction to be the negligible amount they receive monthly, which according to them, would not make much impact in their lives.

This is not surprising because the amount one receives monthly at retirement has a direct bearing on one’s monthly salaries while in active service. With inflation eroding disposable income, it is normal to expect retirees to express dissatisfaction with their monthly payments.

The Nigerian government has a lot of work to do in this regard. It is pertinent to think outside the box to improve the economy so that employees across the board could see improvement in their salaries, which will ultimately improve their pension contributions. Inflation will also be moderate when the economy improves, and in that regard, the monthly receipts by pensioners will make a meaningful impact on their lives.

Another reason the contributory pension scheme still needs to be improved upon is because the informal sector, whose players are few in the pension scheme, should not be discouraged from participating in it. If the current beneficiaries are not satisfied, it will be difficult to persuade informal sector players to key into the scheme.

Get real time updates directly on you device, subscribe now.