Contributory Pension System Is Nigeria’s Most Transparent Pension Arrangement –Experts

A Former President of the Trade Union Congress (TUC), Comrade Bobboi Kaigama and the National Chairman of the Nigeria Union of Contributory Pension Scheme Sector, Comrade Silva Nwaiwu have adjudged the Contributory Pension Scheme as the most transparent pension system in Nigeria’s history.

Speaking on a national TV programme aired on 9 August 2022 in Abuja, Kaigama and Nwaiwu condemned agitations from some government bodies seeking to be exempted from the scheme.

Expressing his disapproval for the exemption of Permanent Secretaries, Heads of Service, Accountants General of the Federation and other top government functionaries, Comrade Kaigama recalled that as at 2004 when the Obasanjo’s administration enacted the Pension Reform Act (PRA), it was meant to address the problem bedevilling the pension system then.

He observed that 18 years down the line, the CPS has accumulated over N14trn.

“This N14trn has been plunged into less risky portfolios. It develops the Nigeria economy. There is no system that might not have one or two problems,” he said.

Comrade Kaigama pointed out that Section 5(1)(a) of the PRA 2014 was derived from Section 291 of the 1999 Constitution of the Federal Republic of Nigeria as amended, which clearly exempts only the Military, Intelligence and Secret Service.

Section 5 (1)(b) of the PRA 2014 exempted public servants who had three years or less to retire as at 2004 when the CPS was implemented.

“This is a system that is well novel, but very laudable. I have never seen a system in this country that is as transparent as the Contributory Pension Scheme.

“The only problem we have is the employers. The employee’s portion of the contribution is being deducted at source and remitted. Some employers don’t remit their own. That’s where we have a problem,” he said.

He also said that delay in releasing money for the payment of accrued rights is a major challenge with the CPS.

Accrued rights are the benefits that retirees are expected to enjoy based on past service rendered before the CPS, which should be added to their RSAs at retirement.

Justifying why the Federal Government should not grant further exemptions to the CPS, Kaigama said yearly budgetary allocations for the payment of pension and retirement benefits is huge.

He said the Federal Government proposed to spend N577bn on payments of pension and gratuities in 2022 alone and exempting any government agency will further increase government’s annual budgets for pension and gratuities.

“Sometimes, some of the budgetary provisions are not funded. If the budget is not funded 100%, those you want to dole out N577bn will not get it. That is why we are saying the CPS is more stable. You can predict it,” he said.

On automation of services to ease access to retirement benefits, Kaigama said, “Before now, you will go from table to table when you retire, but now you don’t have to go to any desk.

“Only your details are needed and your retirement benefits are process. What we are saying to government is keep paying accrued rights and keep contributing your portion of the pension monthly as the employee contributes monthly.”
Similarly, the National Chairman of the Nigeria Union of Contributory Pension Scheme Sector, Comrade Silva Nwaiwu, said the CPS is transparent and should be embraced by every responsibly government.

“There is nothing wrong with the Contributory Pension System. Any transparent government anywhere in the world will buy into it. The security of funds is very tight and very transparent,” he said.

However, he faulted the take-off of the scheme, which failed to segment workers according to years spent in the Civil Service for the purpose of administering their pensions.

“We hurried into it unnecessarily. With proper planning, some of the hiccups would have been avoided,” he said.
Nwaiwu also condemned attempts by some government bodies to exit the CPS.