CPS: Dividend of democracy eluding most states workers

 Contributory Pension Scheme (CPS) remains one of the finest things democracy has bequeathed on Nigerian workers, but the refusal by some states to domesticate the Pension Reform Act (PRA) has continued to deprived their workers this huge dividends of democracy. Chuks Udo Okonta reports.

At a time states are given life pension to Governors who only work for a maximum of eight years as Chief Executives Officers (CEO), workers in most states are yet to have a bite of the accrued benefits in the new pension scheme due to the refusal by their governments to domesticate the law.

Several Houses of Assembly have enacted generous pension entitlements for governors that in many cases provide 100 per cent pay for the incumbent governors buildings, generous medical allowances for them and their family members and annual holiday provisions, all of which are to last for life. Provisions in the pension allowances are also made for staff, security and vehicles that are renewable every three or four years.

The Contributory Pension Scheme (CPS) is believed to be one of the best things democratic rule has bequeathed on workers, who before now queue for days in search of their pension benefits.

The enactment of the Pension Reform Act 2004, which has now given birth to the 2014 Act, removed pension from the hands of government and organisations, and entrenched a refined mechanism that guarantees safety of funds contributed. This new system in the past 10 years has helped retirees enjoyed what their predecessors failed to enjoy as they retire into comfort without the hassle of queuing to have their benefits. At retirement, they are given the option to choose the retirement benefits that suit them and this helps them to get regular payment depending on the plan chosen.

Available statistics revealed that only seven states - Lagos, Ogun, Niger, Kaduna, Delta, Ondo and Jigawa are the ones contributing to the scheme.

It was learnt that in the  South-East Zone, Abia, Ebonyi and Enugu were yet to enact the law on the CPS. Imo State enacted its law on CPS in 2008 and appointed Pension Fund Administrators (PFAs) to register its employees but information available showed that the State has suspended the implementation of the Scheme. 

Anambra State, it was learnt only recently enacted its law on the Scheme and is still expected to carry out the next necessary steps like setting up administration structure, appointment of PFAs, registration of employees by the PFAs, remittance of pension contributions and determination of accrued pension liabilities of workers among others. 

States in the South-West Zone have made reasonable progress in the adoption and implementation of the CPS. Lagos State is one of the pioneers in implementation of the CPS, having enacted its law in 2007. The State had fully implemented the CPS with a total of 45,730 employees registered and pension contributions remittance of N46.50billion as at July, 2013. 

Furthermore, the State had issued retirement benefit bonds of N18.9billion to its retirees and these bonds have been fully redeemed and proceeds paid into the employees’ individual RSAs; while 2,242 employees from the State have retired under the Scheme as at August, 2013.   

In the case of Osun State, it adopted the CPS and enacted its law in 2009. It had also made significant progress in its implementation of the CPS, having so far registered 45,106 employees under the Scheme. It had also remitted over N4.15 billion as pension contributions, while the sum of over N1.90billion had been remitted into the Retirement Benefits Bond Redemption Fund Account. However, the State is yet to renew the Group Life Insurance Policy for its employees in 2013 and had also not carried out an actuarial valuation to determine accrued pension rights of employees.  

 With regards to Ogun State, it adopted the CPS and enacted its law in 2007. It had also made significant progress in its implementation of the CPS having so far registered 24,902 employees under the Scheme and remitted over N10.90billion as pension contributions, while over N3billion had been remitted into the Retirement Benefits Bond Redemption Fund Account held at the Central Bank of Nigeria. However, the State is yet to put in place a Group Life Insurance Policy for its employees. 

In the case of Ekiti State, it enacted its law on the CPS in January, 2011 and has also 37,676 employees registered under the Scheme. Ekiti has conducted an actuarial valuation to determine pension liabilities under the old scheme and put in place a Group Life Insurance Policy for its employees. However, the State is yet to commence remittance of pension contributions into employees RSAs with PFAs. 

Oyo State, has enacted its law on the CPS in January, 2010. However, it is yet to commence the full implementation of the CPS. 

In the North Central zone, Niger State had fully complied with the scheme 

In the North-West zone, Jigawa state which was the first out of the thirty-six states in the federation to enact its law on the Contributory Pension Scheme (CPS) in 2005, had appointed Pension Fund Administrators (PFAs) to manage the Pension Funds which have a total value of N16.49 billion as at September, 2013. 

Kaduna state adopted the CPS and enacted its law in 2007. It has also made significant progress in its implementation of the CPS, having registered 143,722 employees under the Scheme, with Pension Contributions of N9.46 billion as at October, 2013. The state had conducted an actuarial valuation and determined the accrued pension rights of its employees for their service prior to the CPS and established a Retirement Benefits Bond Redemption Fund which currently has a balance of N1.6 billion. The state is however, yet to put in place, a Group Life Insurance Policy for its employees. 

Although Zamfara state adopted the CPS, enacted its law in 2005 and registered 63,254 employees under the Scheme and remitted N534.4 million as employee portion of the Pension Contributions as at November, 2013, it is yet to commence remittance of employer portion of Pension Contributions from the commencement of the CPS. It has also not put in place a Group Life Insurance Policy for its employees. 

Sokoto state enacted its law on the Contributory Pension Scheme in 2007 and registered 46,808 employees with PFAs under the Scheme. The state is yet to commence remittance of the Pension Contributions. 

With regards to Kebbi state, it enacted its law on CPS in 2009 and registered almost 38,000 employees with PFAs under the Scheme. It has however not commenced the remittance of pension contributions. 

The status of Kano state shows that it enacted its law on the CPS in 2006. It is however, yet to appoint PFAs and has not transferred pension funds for management. 

Kastina state drafted a bill on the Contributory Pension Scheme which was reviewed by the Commission and found to be largely in conformity with the Pension Reform Act 2004 (PRA). It has however not translated the bill into law. The compliance status of the states in the North-West zone as indicated clearly shows the imperative for the states to expedite action on the full implementation of the Contributory Pension Scheme.

While the future of workers in these states seems unknown, states like Lagos, Edo, Gombe, Oyo, and Rivers have passed this jumbo law, through which several former governors are already drawing applicable benefits, which in some cases are 100 per cent of what the incumbent is earning, while in others, some benefits in the pension laws are as high as 300 per cent of what obtains in some states.

100 per cent of basic salary in Lagos
The Lagos State Governor and Deputy Governor Pensions Law of 2007 provides that “a former governor and family (spouse and children both married and unmarried) are entitled to free medical treatment which is not capped. Another highlight is that the ex-governor is entitled to a cook, steward, gardener and other domestic staff who are pensionable.
The benefits:
Annual Basic Salary: 100 per cent of annual basic salaries of the incumbent governor and deputy.
Accommodation: One residential house in Lagos and another in FCT for the former governor; one residential house in Lagos for the deputy.
Transport: Three cars, two backup cars and one pilot car for the ex-governor every three years; two cars, two backup cars and one pilot car for the deputy governor every three years.
Furniture: 300 per cent of annual basic salary every two years.
House maintenance: 10 per cent of annual basic salary.
Domestic staff: Cook, steward, gardener and other domestic staff (no limit) who shall be pensionable.
Medical: Free medical treatment for ex-governor and deputy and members of their families (not just spouses).
Security: Two DSS operatives, one female officer, eight policemen (four each for house and personal security) for the ex-governor; one SSS operative and two policemen (one each for house and personal security) for the deputy. PA: 25% of annual basic salary.
Car maintenance: 30 per cent of annual basic salary.
Entertainment: 10 per cent of annual basic salary.
Utility: 20 per cent of annual basic salary.
Drivers: Pensionable (no limit to number of drivers).
Severance gratuity: Not specified.
100 per cent of basic salary in Kwara
The law stipulated that qualified former governors and their deputies be paid pension for life, without other perks like accommodation, cars, and more.
The law was reviewed in 2010 by Bukola Saraki, a former governor of the state and a serving senator, who with the support of the state House of Assembly imposed outrageous raises on all the benefits.
The 2010 law gives a former governor two cars and a security car, replaceable every three years. The governor is also entitled to a “well-furnished 5-bedroom duplex,” furniture allowance of 300 per cent of his salary (which totals over N6 million).
The law also gives the governor five personal staff paid for by the state, eight policemen, three DSS operatives (of which one must be a female), free medicals for the governor and the deputy.
Other entitlements are 30 per cent of salary for car maintenance, 20 per cent for utility, 10 per cent for entertainment, 10 per cent for house maintenance.
100 per cent of basic salary in Rivers
The Rivers pension law was first approved in 2003 by former governor, Peter Odili, having been passed by a state assembly headed by the present governor, Chibuike Amaechi as speaker.
The 2003 pension law provides pension for life for governors and deputies, defining “pension” as embodying annual terminal basic salary, annual transport allowance, annual rent subsidy, annual utility allowance, entertainment allowance, domestic staff of not more than four.
Like Lagos, the new law gives the former governor a house in Rivers State and anywhere in Nigeria. The former governor is also entitled to pension for life at the rate of the governor’s basic salary, 300 per cent of salary for furniture paid every four years, three cars every four years, free medical and 10 per cent for house maintenance.
The law gives the former governor a security detail comprising two DSS operatives, four police officers, 30 per cent for car maintenance, 10 per cent entertainment, 20 per cent utility and several domestic staff.
100 per cent of basic salary in Edo
The Edo State House of Assembly on May 16, 2007 passed a law entitled ‘Provision for the Pension of Rights of the Governor and Deputy Governor of the state.’
This law was passed few weeks before Governor Lucky Igbinedion left office as Governor of Edo State.
It provides for 100 per cent pension for the governor at a rate similar to the salary of the incumbent office holder and for domestic staff among others for the former governor.
300 per cent of annual salary in Oyo
The Oyo State Pension Law 2004 provides that the Governor and Deputy Governor after leaving office shall be entitled to Pension for life at a rate equivalent to the annual salary of the incumbent Governor or Deputy Governor. Furniture Allowance of 300 per cent of the annual basic salary, Leave Allowance of 10 per cent of annual basic salary and severance allowance of 300 per cent of the annual basic salary.