Oyo has poorest pension status in Southwest - PenCom

Lagos State has continued to be a trailblazer in pension administration in Nigeria, but Oyo remains the poorest complaint state with a gloomy future for its pensioners.

Omobola Tolu-Kusimo writes on the status of implementation of states in the Southwest Zone on the Contributory Pension Scheme (CPS).

The National Pension Commission (PenCom) has released the status of states in the Southwest Zone in the Contributory Pension Scheme (CPS) as at September 2020.

The states, Ekiti, Lagos, Ogun, Ondo, Osun and Oyo, are at various levels of implementation, with Oyo at the lowest level.

Although the Oyo enacted the Law on CPS in 2010, it is yet to establish a Pension Bureau and register public employees under the pension scheme.

The pension status of the state has been low since the administration of the late Governor Ajimobi and it remained so even with the Governor Seyi Makinde Administration.

Makinde is also yet to commence the funding of accrued pension rights, although the state law provides for the registration with select Pension Fund Administrators (PFAs).

Worse still, the governor is yet to provide the Group Life Insurance Policy for its employees, who yet to commence remittance of pension contributions, conduct actuarial valuation and open Retirement Benefits Bond Redemption Fund Account.

Findings by The Nation further showed that Oyo is owing pensioners N65 billion gratuities and pensions.

On the other hand, in the latest report by PenCom on state pension status, Lagos has continued to blaze the trail as the most pension compliant state in the country.

The state enacted the law on CPS in 2007 during the Babatunde Fashola Administration.

According to PenCom, the state, however, amended some sections of the Principal Law last year.

It has since established the Pension Bureau and registered employees with PFAs.

Under the Babajide Sanwo-Olu Administration, the state has been remitting 10 per cent employer and eight per cent employee pension contributions regularly, in compliance with the 18 per cent stipulated by the Pension Reform Act PRA) 2014.

The state, which has conducted the actuarial valuation, is funding accrued pension rights. Recently, it opened the Retirement Benefits Bond Redemption Fund Account with two PFAs for state and local governments and has valid Group Life Insurance Policy.

However, according to the report, the only snag is that it has arrears of accrued pension rights.

The Ondo State enacted the law on CPS in 2014, established the Pension Bureau and registered employees with PFAs.

Its Governor Rotimi Akeredolu has been remitting 10 per cent employer and eight per cent employee pension contributions for workers employed from September 2014, in line with amended law (in 2019).

The governor has also provided a valid Group Life Insurance Policy for the public servants.

He has, however, not carried out the actuarial valuation as employees covered under the scheme have no accrued pension rights.

Similarly, Osun State has done well but still needs to do more to ensure good retirement plans for its employees and retirees.

It enacted the law on CPS in 2008 during the administration of former governor Adebisi Akande, established two Pension Bureaus for state and local governments and registered employees with PFAs.

While the state is remitting 7.5 per cent employer and employee pension contributions, the remittances of pension contributions are inconsistent, resulting in arrears.

But the state has conducted actuarial valuation, opened Retirement Benefits Bond Redemption Fund Account with the Central Bank of Nigeria (CBN) and has valid Group Life Insurance Policy.

The state, however, has inadequate funding of Accrued Pension Rights, the backlog of unremitted pension contributions and huge arrears of Accrued Pension Rights.

Ekiti State’s status seems fair but it’s not fully compliant with the pension law.

The state under the administration of Dr Kayode Fayemi amended its pension law in 2017.

Also, the state established Pension Bureau, registered employees with PFAs, is remitting 10 per cent employee, eight per cent employee pension contribution and carried out actuarial valuation.

Meanwhile, Fayemi is yet to open the Retirement Benefits Bond Redemption Fund Account with a PFA,  commence funding of Accrued Pension Rights and has failed to provide Group Life Insurance Policy for civil servants.

Ogun State is not pension compliant and is far from being fair to its employees and retirees.

Although the state enacted Law on CPS in 2008, it amended it in 2013 under the administration of former governor Ibikunle Amosun to extend its transition period.

The state has also established two Pension Bureaus for state and local governments, registered employees with PFAs and is deducting 7.5 per cent employer and 7.5 per cent for employee pension contributions.

Although the amount remitted is below the stipulated 18 per cent stipulated in the Pension Reform Act (PRA) 2014 and remittances have stopped since 2015, Governor Dapo Abiodun is not doing anything about the situation.

Similarly, Abiodun is yet to conduct an actuarial valuation, yet to open Retirement Benefits Bond Redemption Fund Account, commence Accrued Pension Rights funding and has failed to provide Group Life Insurance Policy.