Law News
States stall on implementation of new Pension Act

Many state governments in the country have stalled on the implementation of the new Pension Reform Act, 2014 due to a combination of factors, including the just concluded general elections, investigations have revealed.

The situation has thrown labour leaders into apprehension that the outgoing administrations in some of the states may not commence the implementation of the law before they hand over to newly elected governors.

Our correspondent learnt that while the committees that would oversee the administration of the pension scheme had been constituted in some states, others were in the process of inaugurating similar panels.

It was gathered that the Lagos, Edo, Enugu, Imo, Osun and Taraba state governments, among others, had yet to commence the contribution of 18 per cent of their workers’ salaries to the individual employees’ appointed Pension Fund Administrators under the Contributory Pension Scheme, although the Nigeria Labour Congress in collaboration with National Pension Commission had sensitised the workers to the implementation of the law.

However, employers in the private sector have started paying the increased pension to their workers’ PFAs as confirmed by the Nigeria Employers’ Consultative Association.

The new PRA, which became a law on July 1, 2014 following the assent of President Goodluck Jonathan, is expected to govern and regulate the administration of the uniform pension scheme for both the public and private sectors.

The law provides for an increase in the minimum pension contribution by the employer on behalf of the worker from 7.5 per cent to 10 per cent of their monthly emolument, while the employee will contribute eight per cent instead of the previous 7.5 per cent.

The implementation of the law was to take effect on the July 1, 2014, however, due to non-budgetary provision by the state governments and some private organisations, it was learnt that a compromise was reached with PenCom to commence the increased monthly contribution in January this year.

In a telephone conversation with our correspondent, the NLC Chairman, Imo State, Reginald Anyadike, said that a committee had been raised to look into the issue, adding that the inconclusive nature of the governorship and state House of Assembly elections in the state might stall the ratification of the law by the state legislature.

The Chairman, Edo State NLC, Mr. Emmanuel Ademokan, explained that the body had already taken steps to sensitise the workers to the new scheme in partnership with the pension commission.

He said the Act had already been domesticated by the state House of Assembly, adding that the just concluded general elections had stalled its implementation.

“The Edo State workers are prepared and we have sensitised our members to key into it. The Act has been passed into law and the workers have selected their Pension Fund Administrators,” he explained.

Ademokan expressed optimism that the increased contributions would commence in May or June.

In Osun State, where the workers have not been paid for five months and have embarked on a warning strike, the state NLC Chairman, Sakariyau Adesiyan, said that the government was still owing arrears of its share of the old pension contribution.

“The one we have started, how fair are they on it? The baseline is that we are not concerned about the present law, we are still contesting whether we are going to participate or not. They still owe us 21 months as the government’s contribution; workers are contributing but they are not,” Adesiyan said.

Similarly, in Enugu and Taraba states, the workers were still waiting for the government to take action on the issue.

A labour leader in Taraba State, Mark Ishaku, said that political unrest in the state had caused the delay in the implementation of the law, but expressed the hope that the incoming government would take necessary actions to ensure the payment of its contribution.

“We have had discussions with some PFAs and a committee was set up to go to Jigawa, Kano and Kaduna states to find out how they are implementing their own. No major thing has been done because we want the incoming government to stabilise so that whatever we do will be permanent,” he said.

Recently, the Chairman, NLC, Abuja Council, Abdullahi Yahaya, explained that previous challenges affecting the PRA 2004 abound, in which the 15 per cent deductions had not been remitted coupled with the problem of the government making new laws without enforcing them.

He said “Deducting the new contributions would be difficult moreso that some agencies have not even remitted what they are getting for workers. And the government has not taken action against such organisations.”

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