Time to address misconception about contributory pension scheme

That there is a mutual distrust between Labour unions and the government is not news. But, how far should this distrust be allowed to interfere with national issues where both must collaborate? I was at a state public hearing to domicile the PENCOM law recently and I was concerned by the skepticism and negativity that greeted the hearing. That was my third experience and it made me understand that something was wrong. There is still a serious gap in understanding the Contributory Pension Scheme. The passion and negative emotions of those fighting its implementation are palpable.

There are also reports in some quarters that some states that adopted the CPS are failing, and that is not true. The mix-up with the scheme stems from the challenges of transition from the old scheme to the new one. This problem is only temporary as it will be tackled with time. Some retirees are agitating for full payment of their pensions but that negates the scheme’s idea of a steady and regular income when someone can no longer engage in serious business adventure. True, some retirees want to use the money to complete their houses, but that should be handled carefully. What happens to the retiree, after he completes his building and he is left with an empty account?

I understand the fact that recent experiences with the defined benefits, the syndicated looting of the fund and the annual verification of retirees are a lot to deal with, but we cannot remain in the past.

It is not news that the burden of pension payment on the government is increasing and its power to continue paying is dwindling, so the contributory pension scheme is indeed the way to go.

All governments, world over are unburdening themselves in matters of public utilities, health management and some others are seeking public private partnerships to manage costs, efficiency and effectiveness.

Rather than stay afar off the CPS and throw stones at it, it is better for labour leaders to set up a team to study and understand it. Change is constant. We cannot afford to be left behind.

The investment style of the scheme benefits all. It grows the scheme on compound interest basis annually. When I asked for the statement recently, I saw that my/employers’ contributions had grown with about 40 per cent. Another advantage is that it is transparent and scientific. You can know your monthly position and target or influence a minimum monthly allowance at retirement through Additional Voluntary Contribution. The monthly payments, once determined, is automated and steady as determined.

I must state here that the Contributory Pension Scheme is a global trend slightly adapted in different countries. It is not experimental. It is working just as it is efficient. It is open to all for scrutiny and investigation.