Issues Associated With Contributory Pension Scheme

In Nigeria, various administrations have come up with programmes bordering on Social Welfare, Health Insurance Investment and Pension Schemes.

Many of these schemes however fall below expectation as they have to a large extent not addressed the problems for which they were created.

One of such is the Contributory Pension Scheme, CPS.

Pension administration in Nigeria for instance dates back to the 1950’s and the Pension Reform Act of 2004 paved the way for a new scheme known as Contributory Pension Scheme.

This became imperative in view of the fact that government was finding it increasingly impossible to meet its pension obligations.

In addition, pension payment was cutting deep into the nation’s budget.

The scheme makes it mandatory for the employer to contribute ten percent and employees eight percent monthly.

This money would be made available to workers upon retirement in percentages.

Available records show that Nigeria operated defined pension benefit schemes from January 1, 1946 to June, 2004 but the scheme was dumped because it was fraught with lots of irregularities and corruption.

These include misappropriation of funds, too frequent verification of pensioners with increasing death recorded during the exercise as well as lack of competence in computing pension list and accounts.

Enactment of the Pension Reform Act therefore gave a ray of hope to senior citizens who hitherto had suffered untold hardship in the bid to get their entitlements.

Furthermore, nonpayment or delay in payment of retirement benefits as and when due is also expected to be a thing of the past.

However, disparities between the old system and the new system have continued to generate concern among retirees.

For instance, pensioners under the old system receive seventy percent of their salaries as pension while those under the new reform are paid only fourteen percent which is nothing to write home about.

The last straw that broke the camel’s back is the de-enrollment of these workers from the National Health Insurance Scheme, NHIS, upon retirement.

To many retirees, such move is unacceptable as they need healthcare services at affordable costs at this time more than before in view of the various health challenges that comes with old age.

To this end, government should ensure the re-enrollment of retirees on the scheme or better still create another scheme to cater for their special needs.

To make the pension scheme achieve its purpose therefore, it should be adequately funded and all loopholes plugged to prevent corruption.

States that are yet to enact laws to back up the scheme should do so and all discrepancies between the old and new system should be addressed.

Most importantly, patience, compassion and empathy should be the hallmark of personnel in pension administration office who deal daily with these elderly citizens.

This will not only give them a sense of belonging but also boost their dignity.

Anthonia Akanji

Related Posts

Leave a Reply

Your email address will not be published. Required fields are marked *