‘Retirement benefits not priorities of state governments’

There are indications that payment of pension and retirement benefits in general are not among the key priorities of state governments.

Recently, the National President of the Nigeria Union of Pensioners (NUP), Abel Afolayan, revealed that only six states are up to date with payment of pensions: Anambra, Lagos, Ogun, Plateau, Yobe and Jigawa.

The 30 other states and the Federal Capital Territory (FCT) are struggling with huge backlog of unpaid pension, mostly accumulated under the old defined pension scheme.

The National Pension Commission (PenCom) insists that the way out for states is the Contributory Pension Scheme (CPS), which has been experimented at the federal level with the resultant success of transiting the federal pension story from billions of unpaid accumulated pension to a pension asset in excess of N6 trillion.

However, the CPS has encountered stiff opposition in many states with those that have adopted it reversing the processes several times.

On the recently commemorated May Day, the Governor of Ebonyi State, David Umahi, announced the suspension of the implementation of the CPS in the state till further notice.

As if verbally halting a scheme backed by law was not enough, Umahi ordered the refund of all pension deductions back to the workers, a development that signaled reverting to the old defined benefit scheme that has impeded timely payment of pensions in states.

“By May 15, every deduction made in respect of the Pension Law, will be refunded back to you,” the governor told the state workers.

Ebonyi State is not alone in this struggle with the CPS at the state level as PenCom records show that only Lagos, Ogun, Kaduna, Niger, Delta, Zamfara, Osun, Rivers and Anambra have started remitting pension contributions.

Eleven states have not even signed the pension bill into law. Only Osun, Lagos, Niger and Rivers states have put in place group life insurance policy for their workers in compliance with the contributory pension.

Information sourced from PenCom showed that Zamfara State, though has started remitting pension contributions, is yet to fund the accrued rights of its retirees.

Furthermore, though nine states have started remitting pension contributions, only eight have commenced funding their Retirement Benefit Bond Redemption Fund Accounts (RBBRFAs) as required in the CPS.

The fact that about 26 states and the FCT are yet to make any meaningful progress in migrating from the old defined benefits scheme to the CPS is an indication that pension is not a priority of the governors.

This explains why only six states are up to date with payment of pension in the country with many more states threatening to quite the CPS.

For instance, the Nigeria Union of Local Government Employees (NULGE), in Kwara State, has said that the state government had failed to release the Federal Government’s contribution to local government pensioners since 2009.

Speaking recently on deductions, The NULGE illegal State Secretary, Mr Afolabi Abayomi, asked the state government to henceforth refund Federal Government’s pension contributions deducted.

The non-prioritisation of pension benefits at the state level may not be unconnected to the huge pension burdens on these states.

Recently, the Imo State government acknowledged it had been overwhelmed and called on pensioners to take 50 per cent cut from their entitlements.

The irony is while state governments are procrastinating on implementing the CPS that would be of benefit to their workers, they are swift in enacting laws that allows life pension for governors, deputies and other key political appointees.

For instance, the Enugu State House of Assembly recently passed into law the amended gubernatorial pensions bill of 2015 and other matters connected therewith, approving life pension for former governors.

The state is not among the six that the NUP cleared of pension payment delays nor is the state part of the few that have started remitting pension contributions under the CPS.

The situation in the states has resulted to constant protests and demonstrations by pensioners, who, most often, do not live to enjoy their retirement benefits by the time the state government decides to pay.

Tired with protests, local government pensioners in Ekiti State, under the aegis of Association of Local Government Concerned Pensioners (ALGCP) held a prayer session to seek divine intervention on the over nine months arrears of pension and backlog of gratuities dating back to 2012.