The status of implementation of the contributory pension scheme (CPS) and other schemes has come down to what suits a particular state government with the National Pension Commission carrying out sensitisation workshops, capacity-building programmes, and stakeholder engagement meetings.
The Pension Reform Act 2014, gives states the leeway to adopt pension act that suits each state and this is always done with the buy-in of the labour, the consent is vital in whatever decision the state sticks with. However, states are scaling down their commitments to pension obligation, a handful have enacted pension laws akin to PRA 2014 but many are several steps away from fully implementing joint employer and employee contributions leaving the responsibility on the employee. Such states commitment to pension contribution remains inactive. Yet some have intertwined the old defined benefits system (DBS) with the new contributory pension scheme (CPS), while a few stick with DBS.
The first sign post on the way to CPS implementation is the establishment legal architecture which is the enactment of pension laws and as at Q2 2021, twenty five states of federation had enacted pension laws on the CPS, while seven states were at the bill stage. The total number of states complying with the CPS or taking steps to align are 32 states, leaving behind four states as laggards. This incidentally, puts pressure on the Commission to step up sensitisation workshops and stakeholder engagement meetings.
PenCom details as at the end of second quarter noted that out of the five states operating other pension schemes, four states have adopted the contributory defined benefits scheme (CDBS) while one, (Yobe state) operates the defined benefits scheme (DBS).
Outstanding in the level of compliance by states with the CPS is Lagos state. The state tops the ten states remitting employer and employee pension contributions, along with Edo and Benue. The report states these are the only states in that category that do not have backlog in remittance. The remaining seven, Federal Capital Territory, Osun, Kaduna, Delta, Ekiti, Ondo and Anambra all have backlog of remittances.
PenCom report for the second quarter also list it among the seven states that have conducted actuarial valuation and also included among those states funding accrued rights where FCT, Osun, Kaduna, Delta and Anambra (Local Government) were also included.
The report also grouped Lagos among states complying with valid group life/sinking fund, the others are FCT, Osun, Ondo, and Edo states. However, there are two states that do not remit employer contributions but stay put with only employee remittance- Kebbi and Rivers states.