Many state workers may retire without pension – Ahmad

Former Director-General, PenCom, Mr. Muhammad Ahmad

The National Pension Commission has raised the alarm that many state government employees who will soon retire from active service may leave the civil service with no pension at all contrary to the intention of the Contributory Pension Scheme to which they subscribe to.

The former Director-General, PenCom, Mr. Muhammad Ahmad, said in an interview with our correspondent that some states that had adopted the CPS for their workers were not remitting the monthly deductions from salaries into the employee’s Retirement Savings Accounts.

He said, “We have about 21 states that are in different stages of compliance, but unfortunately, the compliance is a bit slow and haphazard. The reason being that it is not mandatory for them, they enacted their own laws.

“Ideally, their laws should have compelled them to do that. Some of them that started the scheme have either stopped or are paying the contributions haphazardly.”

The implication of the non-remittance of the monthly contributions, according to him, is that the workers may not have any savings in their respective RSAs when they retire.

Ahmad said Lagos State remained the only state to have fully funded its employees’ RSAs.

“About 21 state governments have adopted the CPS, while 14 others are at various levels of enacting their CPS laws,” he said.

However, the immediate past PenCom boss said many of the states had shown interest in the new scheme and gone ahead to enact their own laws, but that some had yet to commence the implementation.

“For the states, they are not compelled to adopt the contributory scheme; but due to negotiation, persuasion and moral suasion, a number of them have enacted their own laws; so, we can only continue to engage them, their workers and other stakeholders with the view to seeing their benefits of complying, that is the best that we can do except if the law is changed,” he said.

Ahmad said the commission had continued to collaborate with and engage state governments in the implementation of the contributory pension scheme.

In this regard, he said the support of the Debt Management Office was obtained to ensure that as a condition, state governments desirous of obtaining bonds must key into the CPS.

“There are even calls that we should amend the Pension Reform Act to make it mandatory for states to comply because the states control a certain number of employees in the country,” he said.

Ahmad said the scheme had registered about 5.28 million workers and also currently had on board about 54,558 retirees from the public and private sectors.