The Contributory Pension Scheme and the Fate of Retired and Retiring Nigerian Workers

Abstract

This paper examines how the Nigerian workers have fared with the new contributory pension scheme. More than thirteen years after the contributory pension scheme came into being through pension reform act of 2004, the scheme is still enjoying low penetration as many public and private organizations are yet to key into it. There is also the pension reform act of 2014 signed into law by former president Dr Goodluck Jonathan to further strengthen pension administration in Nigeria. Laudable as the new contributory pension scheme is only the Federal Government and its agencies have fully keyed into it. There are also a few states such as Lagos, Anambra, Delta, Osun, Niger, Ogun, and Zamfara which have braced the odd to migrate workers into the new scheme from the old one that was full of encumbrances and government interference. While the Federal Government and some states are remitting their counterpart funding to add to that of workers regularly to the pension administrators, not many employers in the private sector can be said to be doing the same. During the first quarter of 2016, many states were yet to embrace the new pension scheme, while only a few private organizations keyed into the scheme. There is no doubt that a very uncertain future awaits many Nigerian workers at retirement as a result of non-compliance of some states and private organizations which are not likely to key into the scheme any time soon owing to the economic recession and revenue crisis in the country. Some retired workers have complained that up to the time they left their employment they never knew their contributions were not remitted to their Pension Fund Administrator (PFA). This paper therefore contends that the regulatory agency, the National Pension Commission has a lot to do in ensuring that employers do not continue to shortchange their workers. Genuine efforts need to be made in this direction so as to restore the confidence of workers that the new scheme is a lot better than what was in place previously.