Exposing State Governments’ Status of Implementation of CPS For Their Employees Part 8; By Ivor Takor

WE have been exposing state governments’ status of implementation of the Contributory Pension Scheme (CPS) in alphabetical order. Today we will be exposing the status of implementations of Kaduna, Kano and Katsina states.

Kaduna State

Kaduna state enacted the State Pension Reform Law in 2007. The law was amended in 2016 and 2020. The state has put in place other milestones towards full implementation of the CPS including the following:

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• Established a Pension Bureau to oversee the process of implementation of the CPS;
• Has registered its employees with Pension Fund Administrators (PFAs);
• Deducting and remitting employer and employees contributions consistently based on 8% employer and 7% employees;
• Conducted an Actuarial Valuation to determine the Accrued Pension Rights of employees that transited from the old Defined Benefits Scheme into CPS;
• Funding Accrued Rights consistently with 5% of monthly wage bill; and
• Instituted a Sinking Fund domiciled with the CBN in place of Group Life Insurance Policy.

The state has arrears of Accrued Pension Rights.

Kaduna State is among the very few states in the country that are implementing and paying pension  in line with their own CPS laws.

The following persons have ruled Kaduna state as Governors from the time of the repeal of the Pension Act 1990 in 2004 to date.

1. Ahmed Makarfi from 29 May, 1999 to 29 May, 2007.
2. Mohammed Namadi Sambo from 29 May, 2007 to 19 May, 2010.
3. Patrick Ibrahim Yakowa from 19 May, 2010 to 15 December, 2012.
4. Mukhtar Ramalan Yero from 15 December, 2012 to 29 May, 2015.
5. Nasiru Ahmed El-Rufai from 29 May, 2015 to 29 May, 2023.
6. UBA Sani from 29 May, 2023 to date.

Kano State

Kano State is among the few states that opted for the Contributory Defined Benefits Scheme (CDBS). The state enacted the Kano State Pension and Gratuity Law 2006 to drive the implementation of the CDBS.

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The state government assigned the administration and custody of pension fund assets to the Kano State Pension Fund Trustees.

The state has commenced the deduction and remittance of both employer and employees contributions into the Fund Account opened by the Trustees.

The administration and custody of pension fund assets by the Board of Trustees is a contravention of the provisions of sections 54 and 56 of the Pension Reform Act 2014.

The state is yet to put in place the following milestones for the smooth implementation of the CDBS:

• Yet to establish a State Pension Bureau; 
• Yet to conduct an Actuarial Valuation to determine the quantum of its liabilities and funding gap; and
• Yet to transfer pension assets to a licensed Pension Fund Custodian (PFC).

State employees have not been registered with Pension Fund Administrators (PFAs)  as the CDBS does not require the registration of employees and opening of Retirement Savings Accounts (RSAs) with PFAs.

The state has pension and gratuity liabilities.

The following persons have ruled Kano state as Governors from the time of the repeal of the Pension Act 1990 in 2004 to date.

1. Rabiu Musa Kwakwanso from 29 May, 1999 to 29 May, 2003.
2. Ibrahim Shekarau from 29 May, 2003 to 29 May, 2011.
3. Rabiu Musa Kwakwanso from 29 May, 2011 to 29 May, 2015.
4. Abdullahi Umar Ganduje from 29 May, 2015 to 29 May, 2023.
5. Abba Kabir Yusuf from 29 May, 2023 to Incumbent.

The state has a life pension law in favour of former governors and former deputy governors, which guarantees that these former political office holders of the state maintain lives of luxury through generous pension and other benefits.

Katsina State

Katsina state drafted the CBDS Bill in 2021. The Bill has been passed by the State House of Assembly and awaiting the assent of the Governor. However, it is yet to implement any other milestone towards the full implementation of the CDBS. The milestones include the following:

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• Yet to establish a Pension Bureau to oversee the process of implementation of the CDBS;
• Yet to commence deduction and remittance of employer and employee pension contributions; and
• Yet to conduct an Actuarial Valuation to determine the quantum of the liabilities and funding gap;

The CDBS does not require the registration of its employees with Pension Fund Administrators (PFAs) and does not also require the institution of a Group Life Insurance Policy.

Nineteen years after the repeal of the Pension Act 1990 that was of universal application in the federal and states public services in 2004, Katsina state only has a Bill on the DCBS and stopped at this level. The state therefore has no law that protects the pension rights of its employees, contrary to the provisions of the 1999 Constitution as amended.

The following persons have ruled Katsina state as Governors from the time of the repeal of the Pension Act 1990 in 2004 to date.

1. Umaru Musa Yar’Adua who later became President of the country, from 29 May, 1999 to 29 May, 2007.
2. Ibrahim Shema from 29 May, 2007 to 29 May, 2015.
3. Aminu Bello Masari from 29 May, 2015 to 29 May, 2023.
4. Dikko Umar Radda from 29 May, 2023 to Incumbent.

Section 210(1) of the Constitution of The Federal Republic of Nigeria 1999 as amended, provides that “Subject to the provisions of subsection (2) of this section, the right of a person in the public service of a state to receive pension or gratuity shall be regulated by law.

Subsection (2) provides that “Any benefit to which a person is entitled in accordance with or under such law as is referred to in subsection (1) of this section shall not be withheld or altered to his disadvantage except as is permissible under any law, including the code of conduct.”

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Subsection (3) provides that “Pension shall be reviewed every five years or together with any State Civil Service salary reviews, whichever is earlier.”

Key pension information were sourced from PenCom website.