The Director-General of the National Pension Commission (PenCom), Mrs Aisha Dahir-Umar has seen as unnecessary the call by some government agencies to exit the Contributory Pension Scheme (CPS).
Mrs. Dahir-Umar’s view was contained in a Book she recently published titled: “Fighting for the Future: Nigeria’s Pension Reform Journey”.
She noted that there were enough provisions within the Pension Reform Act to address the complaints being made by the campaigners.
“A raging issue is the campaign by some agencies to opt out of the CPS. There is absolutely no need for that.
“There are enough provisions within the Pension Reform Act to address the complaints being made by these campaigners.
“I am, thus, of the opinion that the political authorities have to be firm so that the CPS is not undermined by the “exit” clamour of some Government officials and some agencies”, she said.
The PenCom boss said, the scheme could face a mass exodus of contributors if nothing was done to change the trend.
“While the CPS has faced some challenges since inception, attempts by some governmental bodies and senior officials to exit the Scheme are unhelpful to the system.
“The successful exit of one will encourage the other to do the same. We may soon be faced with an exodus if serious efforts are not made to put a stop to this trend.
“Head of the Civil Service of the Federation (HCSF) and Permanent Secretaries have exited via a presidential fiat while the National Assembly Service has been exempted by law.
“In May 2023, a bill was passed by the National Assembly exempting the Nigeria Nigeria Police Force (NPF)”, she lamented.
She further explained that “the old system did not work efficiently, especially in the Public Sector, because pensions needed to be budgeted for by the Government.
“A budget is essentially a statement of intentions based on expected income. When the Government’s revenue does not match its projected expenditure, some budgetary items will suffer.
“Having to choose between paying those still in active service and those who
have retired is not always a hard call for the Government.
“That was why pensioners suffered for decades when the Nigerian economy faced serious challenges. The system was unsustainable and complicated”, she said.
She listed Funding, Weak administration, Lack of commitment, Fraudulent practices, and Cumbersome processes as some of the challenges in the management of public pensions.
However, she said, “the success stories of the reform are very inspiring. The biggest is the exponential growth in the number of pension contributors and the settlement of pension claims as and when due under the
CPS.
“I am positive that the huge Informal Sector will gradually embrace the Scheme through the Micro Pension Plan and agencies lobbying to opt out will have a rethink.
“By and large, what the Nigerian Pension Industry has witnessed in the last two decades is nothing short of a revolution. The country has got it right and should continue to consolidate the gains made so far for the sake of a greater future”, she said in the 10-chapter book.
