Guardian

SIX states in the country have fully complied with the Contributory Pension Scheme (CPS) according to the Pension Reform Act 2004, while six other states have their own pension arrangements in place for their employees.

However, 24 states in the country are yet to have any form of pension arrangements for their workers. The National Pension Commission (PenCom) and Pension Fund Operators Association of Nigeria (PENOP), worried by this trend, have devised measures to enlighten these states to key into the scheme.

The President of PENOP, Dave Uduanu, said during the yearly general meeting of the association in Lagos that the officials of the commission have begun to go round the states to educate officials of the affected states on the need for them to key into the contributory scheme for the benefit of its workers.

Besides, he said, the review of the Pension Reform Act 2004 that is currently going on in the National Assembly will strengthen the act to bring the informal sectors of the economy into the contributory scheme.

According to him, although the pension system as we have it was still largely geared towards ensuring peaceful retirement for people in the formal sector of the economy, but the regulators have realised that the informal sector was by far larger than the formal sector, hence the need to bring the retirement savings account to the sector.

According to him, the new pension system was built on accountability and transparency, quite unlike the old defined benefit scheme, where hear of disappearance of pension, long queues of elderly people waiting for pension payment, but under the CDPS, the clients had access to their retirement savings accounts (RSA) and they could also monitor the contributions and growth of their pensions over the period of their active years of service.

Dr. Demola Sogunle, a member of the association and chief executive officer, Stanbic IBTC Pension Managers Limited, said that the operation of the contributory pension scheme in the country was one of the beautiful things that has happened in the country, as over N3.4 trillion pension assets has been accumulated, and 5.3 million contributors captured in the CPS.

According to him, over 54 million working Nigerians were still not captured in the pension reform.  According to him, the commission and association has very robust working relations to help enlighten Nigerians on the need to capture all workers in the system.

He said: “We need to extend the benefits of the new scheme to many Nigerians and a coverage ratio of about 25 per cent will translate to touching the lives of about 18 million Nigerians. The impact of this on the economy, on the one hand, and the social well being of average Nigerian on the other are enormous.

“Our pensions business is not relenting in getting the messages of the CSP out there. We will continue in our drive to register customers even in the formal sector who are yet to come under the CPS. We believe that continued awareness of the CPS will also go along way in getting more people to the join the system.”