The National Pension Commission (PenCom) has listed only seven out of the 36 states in Nigeria as being current in their remittance of pension fund deductions from the salaries of their employees.
The commision said these states were also consistent in remitting their own part of contributions into the Retirement Savings Account (RSA) of their employees as mandated by the contributory pension scheme (CPS).
In its latest second quarter 2019 report, the commission listed the seven states as Delta, Edo, Ekiti, FCT, Jigawa, Kaduna and Lagos.
On the other hand, it listed 28 states that do not remit both pension deducted from their workers’ salaries and contributions to the RSAs of their workers to include Abia, Ebonyi, Enugu and Imo, Akwa Ibom, Bayelsa, Cross River, Oyo, Osun, Ondo and Ogun states.
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Other defaulting states are Anambra, Rivers, Adamawa, Bauchi, Benue, Borno, Ebonyi, Gombe, Kano, Katsina, Kebbi, Nasarawa, Niger, Plateau, Sokoto, Taraba and Zamfara.
However, Yobe State, which has no pension scheme, could also be classified as one of the defaulting states.
Section 1.3.2 Section 2 (1) of the Pension Reform Act 2004 (PRA), 2014 provides that CPS should apply to any employee in the public service of the federation, the public service of the Federal Capital Territory (FCT), the public service of the state government, the public service of the local government councils and the private sector.
PenCom in the report said whereas Section 9 (3) of the Act requires every employer to which the Act applies, to take a life insurance policy for its employees for a minimum of three times the annual total emolument of the employees, sub-section 2.1 of the Act further states that the employer shall fully bear all costs in relation to procurement of the life policy in addition to and separate from, the contributions to be made by the employer to each employee’s RSA.
The report showed that most states have no group life insurance policy arrangement for their workers.
For instance, out of the 36 states, 35 states have no group life insurance arrangement for their workers.
It also stated that only the FCT and Kaduna have valid group life plan for their workers, while 32 states do not.
“State governments continued to make progress in the level of implementation of the CPS. As at the second quarter of 2019, a total of 25 states of the federation have enacted pension laws on the CPS; seven states are at the bill stage and five have, however, embarked on pension reform other than the CPS,” the report added.
