Home NEWS OTHER BUSINESSES Pension experts urge govt to prioritise funding workers’ accounts

Pension experts urge govt to prioritise funding workers’ accounts

Pension experts have charged the federal and state governments to prioritise funding of their respective workers’ Retirement Savings Accounts (RSAs), saying FG has been unable to remit pension contributions since October 2015, while state governments are defaulting in the payment of their workers pension contributions as well as salaries.

The experts, who spoke at the 2015 Nigerian Insurance & Pension Awards organised by  a media house on Friday said funding, which was a serious challenge under the old pension scheme, has equally resurfaced in the new pension scheme, known as Contributory Pension Scheme(CPS).

Former board member, National Pension Commission (PenCom), Mr. Ivor Takor, said most illiquid states have suspended pension budget for now, instead they paying salaries without remitting the employers’ monthly pension contributions into their workers’ RSAs.

He said the pension liabilities of some states is so huge, that even if situation improves, it’s going to be difficult to offset them, wondering why some states could owe two years pension arrears, even as the Federal Government accrued pension rights is also on the increase.

According to him, “We understood that the FG has not been able to remit pension contributions since October 2015 and this has to do with not only the employer’s contributions, but what then is happening to the contribution of the employees, because it has been deducted from their salaries and the law says the deduction should be paid into the RSAs of the employees, not later than seven days after salaries are paid.”

Government, he said, was not adequately funding the accrued rights at the federal level which is affecting the payment of pension as at when due.

Moreover, he said governments at the federal and state levels have yet to commence the implementation of the increase in pension contribution from 15 per cent to 18 per cent.

“Then, the greatest problem lies with the states. PenCom said only 10 states have keyed into the CPS, but if you look critically, it is Lagos State that is somehow implementing the CPS. Yes, these states have commissions, bureaus and laws, but are they contributing as at when due? That is the situation. Then, majority of the states don’t have laws. This means the workers have no form of pensions,” he pointed out.

Stating that these are issues that need to be addressed holistically, he added that it’s unfortunate that some of these governors left office and made only some segmented pension laws that only cover them and their office holders, some of them drawing massively from the purse of the state in the name of pension to build houses and cars and did not make laws for the state workers.

“This is very bad, it’s immoral and it should be addressed by current governors”, he advised.

The Director-General, Lagos Pension Commission(LASPEC), Mrs. Folashade Onanuga, said in spite of the challenges the states were passing through, their inability to prioritise pension was responsible for the pension backlog they owe.

“Though there are a lot of things contending with state funds, I believe if there is a commitment towards pension, we will always find a way to pay it,” she stressed.

She implored the defaulting states to borrow a leaf from Lagos State, ranked as the first in pension implementation, by making the welfare of their staff either in or out of service, the utmost agenda, hence, paying their monthly pension as at when due.

While speaking on the need to amend the PRA 2014, Director-General, Ondo State Pension Commission, Mr. Jaiyeola Olowosuko, said the Group/Life Insurance that workers enjoy while in service can also be implemented after service to make the CPS more robust, by amending the pension scheme to include a medical and insurance covers, so that the insurance takes care of them in their old age at a premium already paid while in service.

Proffering solutions to the challenges of the CPS, Olowosuko called on the Pension Fund Administrators (PFAs) and PenCom and respective employees to ensure the perfection of documents which must start a year before retirement, while the necessary documentations with PenCom should equally be done on time so that upon retirement, there is no delay for any retiree to access his or her pension entitlement.

According to him, “The necessary clearance with various employee should be done a week before retirement.  We have seen instances where a worker’s RSA is robust and yet 3 to 6 months after retiring, the money is not accessed.  This is not good for life after service (working).”

Meanwhile, Inspenonline Media has awarded FBNInsurance as the 2015 Insurance Company of the Year, while its Managing Director, Mr.Val Ojumah was awarded the 2015 Inspenonline Insurance Man of the Year award for deepening insurance penetration and acceptance, thereby contributing to the growth of the insurance industry in the country.

The award ceremony saw Stanbic IBTC Pension Managers Limited winning the Pension Fund Administrator (PFA) of the Year award, with the Sovereign Trust Insurance Plc getting the Corporate Brand of the Year Award, even as Corporate Social Responsibility of the Year award went to Consolidated Hallmark Insurance Plc and Royal Exchange Plc.

Plum Insurance Brokers Limited went home with the Insurance Broker of the Year award, while the Association of Registered Insurance Agents of Nigeria (ARIAN), for the second year in a row, won the Best Professional Group of the Year Award, with Excellence Award going to Lagos State Pension Commission (LASPEC), on behalf of Lagos State Government.

Speaking on the motive of the award, which started four years ago, the Editor, Inspenonline , Mr. Udo Chuks Okonta, said the award was designed to celebrate organisations and individuals who have helped to reshape activities in the insurance and pension industries and by extension, the economy.

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