The seven states in the Northwest are struggling to adhere to the Contributory Pension Scheme (CPS) nearly 17 years after the National Pension Commission (PenCom) established the scheme.
Upon the commencement of CPS in July 2004, the federal government had directed states and federal agencies as well as private sector firms to mandatorily remit their employees’ pensions through the CPS.
However, a publication by PenCom seen on Sunday revealed that, as of December 2020, the states in the northwest still have a long way to go to meet the CPS obligations.
At least, Jigawa, Kaduna, Kebbi and Zamfara are doing some sorts of pension remittances while Kano, Katsina, and Sokoto have not remitted pension in any form.
Jigawa which has a Contributory Defined Benefits Scheme (CDBS), not CPS since 2005, remitted 17% employer fund and 8% for employees through 10 Pension Funds Administrators (PFA) until April 2020.
Kaduna amended its CPS law in 2016 and is contributing pension funds but reduced employer’s contribution to 8% from 13%, violating provisions in the Pension Reforms Act of 2014. It however contributes the 7% employees’ part, too.
Kano enacted a CDBS law in 2006 and is deducting pension contributions under the old pension scheme, not CPS.
Katsina drafted a bill on CDBS in 2017 and has not gone beyond that. However, Kebbi has had the CPS law since 2009 but remits only 7.5% employees’ portion without contributing its quota.
Sokoto has had a CPS law since 2007 and has registered some employees with PFAs but has not begun any pension contributions.
Zamfara repealed its CPS law and enacted a law on CDBS in 2019; it was remitting just 7.5% of employees’ contributions during the CPS regime but stopped every remittance with the CDBS law.
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