As part of efforts to ensure the success of contributory pension scheme in Nigeria, the National Pension Commission (PenCom) has mandated the State Pension Bureaux to report to the commission, should any State or Local Government fail to remit pension contributions on behalf of their employees.
The framework provides that “The bureaux are to report to the Commission, latest three working days after the expiration of the seven working days grace period after the payment of salaries, if the State or Local Government is in default of remittance of any contributions.”
Although the Pension Reform Act 2004 does not mandate states and local governments to join the contributory pension scheme, in recognition of the challenges facing the pension schemes at the states and local government levels, the Council of States, at its meeting of July 2006, unanimously resolved to adopt the scheme for the States and Local Government Councils (LGCs), in line with the philosophy and aims of the Pension Act, which is presently operational at the federal level and private sector.
As PenCom went further to draft State Law to guide States in formulating their pension laws, to facilitate effective implementation of the Contributory Pension Scheme, Section 22 (1) of the draft State Law specified the establishment of State Pension Bureaux.
The Bureaux are also required carry out the functions of the defunct State Pension Departments and the Local Government Pension Boards, and shall, in particular make budgetary estimates for existing pensioners and officers exempted from the Contributory Pension Scheme.
It is also mandated to receive budgetary allocations and make payments to the pensioners, as and when due; as well as ascertain deficits in pension payments, if any, to the existing pensioners or the categories of officers exempted from the new Scheme.
Besides, the Bureaux is required to pay gratuity and pension to the existing pensioners and the category of officers exempted under the new Scheme, in accordance with relevant and applicable computations under the existing Pay As You Go Pension Scheme of the State Public Service.
It is also saddled with the responsibility to establish and maintain a database of all pensioners and contributors under the Scheme; receive, review and respond to complaints and liaise with the Commission, where necessary, on their resolution; while also coordinating and overseeing the activities of the actuaries that shall undertake the actuarial valuation of the past service liabilities of existing employees.
At the same time, the bureaux are required to render periodic reports on the status of contributions and other remittances; monitor compliance levels and appraise the effectiveness of operations of the Scheme within the State, with a view to making suggestions for improvement to the Commission.
As the Pension Ac states that PenCom shall ensure the maintenance of a data bank of all pensionable employees in the States and Local Governments, the State and Local Government Pension Bureaux are to collate and forward to the Commission, certain required information on every serving employee in this regard.