Katsina, 20 Others Not Remitting Pension Deductions From Workers’ Pay

Katsina, Imo, Oyo, Ogun, Benue and Akwa Ibom are among the 21 states that have refused to remit about N3.4bn pension contributions deducted from workers’ pay into their Retirement Savings Accounts.

Since the implementation of the Pension Reform Act in 2004 by the National Pension Commission, a total of 21 state governments have yet to remit pension deducted from workers’ pay.

Part of the objectives of the Pension Reform Act is to ensure that every person who worked either in the public service of the federation, Federal Capital Territory, states and Local Government Areas or the private sector receives his/her retirement benefits as and when due.

Through the Pension Reform Act, the commission has been able to establish a uniform set of rules, regulations and standards for all aspects of pension administration, including payment of retirement benefits to retirees among others.

An investigation by our correspondent showed that while 21 states were not remitting pension deducted from workers’ pay, 15 of them were remitting but at different stages of remittance.

The 21 states that are not remitting pension under the Contributory Pension Scheme are Ogun, Niger, Kano, Imo, Sokoto, Kogi, Bayelsa, Nasarawa, Oyo, Katsina, Akwa Ibom, Benue and Plateau.

Others are Cross River, Enugu, Abia, Ebonyi, Taraba, Bauchi, Borno and Adamawa.

A report on the compliance rate of states with the Pension Reform Act obtained from PenCom showed that Ogun State stopped remitting pension contributions with huge arrears of unremitted pension.

The report said while Ogun State was funding the accrued rights of employees, there was no valid group life insurance policy in place in the state for workers.

For Niger State, the commission in the report stated that it stopped remitting pension contributions in 2015, adding that the government of the state was also not funding accrued rights and no group life insurance policy in place.

Further analysis of the report showed that apart from not remitting pension deducted from workers’ pay, Imo, Kebbi, Sokoto, Bayelsa, Kogi, Nasarawa, Oyo, Katsina, and Akwa-Ibom states did not fund accrued rights neither did they have group life insurance policy for workers.

Also, Benue, Kwara, Plateau, Cross River, Enugu, Abia, Ebonyi, Taraba, Bauchi, Borno, Gombe and Adamawa have yet to fund accrued rights or put in place group insurance policy for workers.

Further findings revealed that out of the 15 states that are remitting pension contributions, only four states had been remitting the pension of their workers regularly.

The other nine states are at various stages of remittances. The four states with regular remittances of their workers’ pension deductions are Lagos, Edo, Kaduna and the Federal Capital Territory.

The states with staggering remittances are Jigawa, Delta, Zamfara, Osun, Rivers, Kano, Ekiti and Anambra.

For Jigawa State, the commission explained that the state was remitting contributions to selected Pension Fund Administrators but implementing a Contributory Defined Benefits Scheme.

For Delta State, it said the state was remitting complete and regular pension contributions for state employees, but remitting only employees’ portion for local government workers.

The commission added that the state-funded accrued pension rights of both local government and state workers but had huge arrears of accrued pension liabilities. The report said the state did not have group life insurance cover for its workers.

For Zamfara, analysis of the report showed the state was remitting pension contributions of employees with no funding of accrued rights nor had any group life insurance policy.

Osun State, according to the report, remitted pension contributions but in an inconsistent manner, “resulting in a backlog of pension contributions.”

It described the state government’s funding of accrued pension rights as inadequate, noting that this had resulted in huge arrears of accrued rights. Osun State, it added, had no group life insurance policy.

For Rivers State, it said the government of the state remitted only employees’ portion of pension contributions, adding that the state had a huge backlog of unremitted employer’s portion of pension contributions.

It added that the state had in 2012 set aside the sum of N300m with Premium Pensions for the payment of accrued rights.

For Kano State, the commission said the government was deducting pension contributions but under the management of the Board of Trustees. The state has yet to transfer the pension assets to a Licensed Pension Operator.

The commission in the report also said Ekiti remitted pension contributions for state and local government employees up to January 2019, adding that the government had yet to fund accrued rights of workers.

It was reported on Thursday that states operating the Contributory Pension Scheme refused to remit about N3.4bn pension contributions deducted from their workers’ monthly remunerations into their respective Retirement Savings Accounts with their Pension Fund Administrators.

The acting Director-General, National Pension Commission, Aisha Dahir-Umar, disclosed this during the second quarter consultative forum for states in Lagos recently.

Dahir-Umar said, “Based on PFAs’ returns, over N3.4bn pension contributions are uncredited into state employees’ RSAs as of May 31, 2019, and the age analysis showed that over 38 per cent of this amount had been outstanding for over one year.

Dahir-Umar, who was represented by the Head, States Operations Department, PenCom, Dan Ndackson, said a major item, which should occupy a pride of place during deliberations, was the recurring issue of uncredited remittances, which denied concerned employees the investment income that should have accrued to them.

She added that it was heart-warming to observe the steady progress of the implementation of the CPS in the states, especially with regards to the remittance of pension contributions.

“Returns submitted to the commission by the PFAs showed that over N8.09bn was remitted to them as pension contributions of state employees in the first quarter of 2019,” she said.

The PenCom boss informed that the second quarter had recorded remarkable achievements in ensuring seamless implementation of the CPS in states.

In this regard, she said the commission, as part of its mandate of supervising the smooth implementation of the CPS and to ensure excellent service delivery, especially in state pension administration, introduced branch inspection of PFAs in states.