By Omotoye Olorode Nigeria’s working people have been confronted, over time, with two diseases of pandemic proportions. One of the…
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Introduction THERE comes a time in a person’s life circle when he will no longer be fit for active economic…
Introduction THE pension reform carried out in Nigeria in 2004, brought about the enactment of the Pension Reform Act 2004,…
Introduction IN recent years, we witnessed a drastic global shift in pension policy away from public (state) and private employer-sponsored…
The Act places certain obligations upon the employer who are therefore expected by law to comply with such obligations. Non-compliance is unacceptable because it puts the future of the employee at risk. The Act provides PENCOM, the regulator, with powers to enforce compliance. Where there is non-compliance by the regulator, the Act also has provided regimes of sanctions for non-compliance. The non-compliance of the federal government, with some of the obligations placed upon it in the Act as the largest employer in the country, is the weakest link in the pension reform; the Contributory Pension Scheme; and the regulation of the pension industry.
The Commission operates under a Board of Directors (The Board) headed by a part-time Chairman with the Director General as the Chief Executive Officer. The Board is made up of representatives of critical stakeholders, such as the Head of Civil Service of the Federation; Federal Ministry of Finance; Nigeria Labour Congress; Trade Union Congress of Nigeria; Nigeria Union of Pensioners; Nigeria Employers Consultative Association; Central Bank of Nigeria; Securities and Exchange Commission; Nigerian Stock Exchange; and National Insurance Commission.
The greatest challenge the NLC has so far faced since the administration of the affairs of Congress were returned to elected trade union leaders in January 1999, which was self-inflicted, was the post-10th National Delegates Conference 2015 crisis. As much as we would have wished it never happened, it did and the labour movement, especially the NLC, had its image dented. The crisis took away our solidarity, which is the one pillar that makes our organisation, the NLC, strong. Employers, especially the federal government, surely celebrated the conflict albeit quietly because the government as the biggest employer in Nigeria was the beneficiary while it lasted.
The Contributory Pension Scheme, unlike the old Define Benefit Scheme that it replaced, has inbuilt safeguards meant to protect the fund from mismanagement and fraudulent practices. The scheme is fully funded through monthly contributions, which are put into Retirement Saving Accounts (RSAs) owned by employees. Employers cannot access the funds. The funds are warehoused by Pension Fund Custodians and managed by Pension Fund Administrators. The law established the National Pension Commission, among other objectives, to regulate, supervise and ensure the effective administration of pension matters and retirement benefits in Nigeria.
Social security means measures, processes and systems aimed at providing, maintaining and ensuring a humane and dignified standard of living not only for those working but for general citizenry who for one reason or the other are incapacitated and unable to earn a living.
In consideration of a better old age for workers, the Act established a CPS as a panacea to old age poverty and destitution, especially for those who had been on paid employment in their active age. The CPS guarantees pension, which is an amount of money paid regularly and periodically to a member of the scheme who is no longer capable of working as a result of either ill-health or old age.