The House of Representatives has called for the review and reform of the Contributory Pension Scheme (CPS) in order to enhance and guarantee Retirees’ Welfare.
This followed the adoption of a resolution on a motion moved by Hon. Afuape Moruf Afolabi at the Plenary on Wednesday.
While presenting the motion, the lawmaker reminded that, the Contributory Pension Scheme (CPS), established under the Pension Reform Act of 2004 and amended in 2014, was designed to secure retirement benefits for Nigerian workers through contributions from employers and employees.
According to him, Pensions Funds are managed by Pension Fund Administrators under supervision of the National Pension Commission to ensure regular and reliable pension payments to retirees.
He however noted that, despite the aim of the Contributory Pension Scheme, most retirees are faced with hardships due to meager pension payments, resulting in widespread poverty among senior citizens.
Hon. Afolabi said, “The structure of the Contributory Pension Scheme limits retirees to receiving only 25% of total pension savings as a lump sum, with the remaining 75% retained by Pension Fund Administrators (PFAs) for investment, yielding disproportionately low returns.
“The Contributory Pension Scheme has failed to address the harsh economic realities faced by retirees, such as increasing inflation and living costs, alongside the lack of transparency in pension fund management which has led to distrust among retirees.
“The disparity between the treatment of retirees under the Contributory Pension Scheme and Defined Benefit Scheme (DBS) raises concerns of equity and fairness”.
The House adopted the motion and urged the Ministry of Labour and Employment to collaborate with stakeholders to reform the Contributory Pension Scheme, aiming for a fair, sustainable, and dignified pension system.
It also urged the National Pension Commission (PENCOM) to enhance oversight of Pension Fund Administrators by imposing stricter regulations and transparency measures, ensure equitable returns on investments, prioritizing the interests of retirees and implement measures to provide retirees with greater control and flexibility over their pension funds.
The House further urged the National Pension Commission (PENCOM) to address non-remittances of pension contributions by employers, impose stricter penalties and ensure full compliance.
