• Monday, July 15, 2024
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Lack of political will, others, impede Contributory Pension scheme in states-Pencom

Contributory Pension Scheme (CPS)

The National Pension Commission (Pencom) on Thursday announced that lack of political has impeded the success of the contributory pension scheme (CPS) in states as most governors are yet to embrace the scheme.

Babatunde Philips, Head, States operation department, speaking at the 2019 Journalist workshop titled ” Expanding coverage of the pension industry” held in Benin, said that the need for states to adopt the CPS cannot be overemphasized as it present opportunities for state governments to access available pension fund to deepen infrastructural development in states.

Philips said that 25 out of the 36 states have enacted the CPS, while 9 states and the FCT have commenced implementation, remitting both employer and employee pension contribution.

He said “The Contributory pension scheme stands as a legacy against old age poverty, as well as enhances the integrity of state governments’ payroll”.

“The right of states to enact their own pension laws had been a clog in wheel of progress as some states delay in enactment of their laws. The lack of political will by some state executive governors had also hindered the implementation as the decision more or less depends on the states’ governors”.

Philips speaking further said that delay in adoption of the scheme by some states is due to poor understanding by other state official and labour union.

“Steps towards ensuring full implementation of the CPS in states include; enactment of the state pension law, establishment of state pension bureau, commencement of actuarial valuation to determine accrued rights of employees, opening of RSA for all eligible employees amongst others”.

Aisha Dahir-Umar, Acting Director General, Pencom in her remark said that the commission over the years has remained focused it’s objective in ensuring the conclusion of the pension industry transformational initiative adding that the commission is out to get players of the informal sector bthrough the micro Pension plan which was launched by the President in March, 2019.
She said “As at September 2019, the number of registered contributors under the CPS has grown to 8.85 million while pension fund assets have grown to N9.58 trillion. This growth indeed justifies our emphasis on the safety of pension funds as the bedrock of sustaining the CPS and assure all stakeholders that the pension reform remains steadily on course”.

“These modest milestones notwithstanding, the Commission and Pension Operators are committed to actualizing the growth potentials of the pension industry”.

The DG who was represented by Kunle Odebiyi, Head of Micro Pension Scheme, explained that the Commission’s strategic focus which aims to expand access to pension through the Contributory Pension Scheme (CPS), is also aimed at expanding coverage of pension through transformational initiatives especially the Micro Pension Plan (MPP).

“Enhanced Contributor Registration System (ECRS), which is an in-house developed ICT application which was deployed in June 2019 to enhance the integrity of the contributors’ database, has been integrated with the National Identity Management Commission (NIMC) database to help authenticate the uniqueness of individuals seeking to register under the CPS.

“The ECRS provides a platform for the registration of Micro Pension Plan participants and is a major step towards the introduction of the transfer window, which will enable contributors change to the PFAs of their choice, in line with Section 13 of the Pension Reform Act (PRA) 2014”, he said.

Abisola Onigbogi, The Executive Director (Technical) of ARM Pension, in his remark explained that the informal sector has a huge potential to contribute significantly to the pension sector because apart from having a concentration of 70 per cent of total workforce in Nigeria, it also makes up about 17 million business and contributes 59.7 per cent to the Gross Domestic Product of the country.

He also stated that efforts are going to ensure partnership with service providers to provide access to basic services such as health care, insurance services among others, with the aim of bringing more persons in the informal sector into the pension scheme as a greater percentage of Nigerians which represent the informal sector are still out of the pension coverage.

“We need to deepen financial inclusion which stands at 65 per cent through mobile phone subscription. There are currently 172 million mobile subscribers, therefore, we need to make it easier for contributors to contribute to their pension account from the comfort of their mobile phones.

“Providing means of identification by enrollees has been a major challenge for us, therefore, we are working with the regulators to ensure that the requirements are relaxed a little too encourage more people into the scheme,” he said.

 

Cynthia Egboboh, Abuja.