Five years after the Pension Reform Act (PRA) 2014 mandated employers in the public and private sector to increase pension contribution rate to 18 per cent, the federal and state governments are yet to comply with the law, Pension Fund Operators Association of Nigeria (PenOp) said yesterday.
Speaking during its quarterly press briefing in Lagos, its President, Mrs Aderonke Adedeji said the public sector is still contributing 15 per cent, representing 7.5 per cent employer contribution and 7.5 employee contribution as against 18 per cent stipulated by the PRA 2014.
Mrs Aderonke who is also the Managing Director of Leadway Pension Limited said this is unlike the private sector where there is more compliance by contributing the stipulated 18 per cent monthly.
She said under the defunct PRA 2004, the rate of pension contribution for employees was a minimum of 15 per cent of monthly pay.
This, she said, is shared into two – 7.5 per cent each to be paid by the employer and the employee.
These, she said had been reviewed upward by Section 4(1) of the PRA 2014, to a minimum of 10 per cent for the employer and minimum of eight per cent for the employee, thereby making it 18 per cent of an employee’s monthly emolument.
She said: “The public sector has not yet complied. The still pays 7.5 employee and 7.5 per cent employer contribution. But we see compliance from the private sector at a higher level than the public sector.
“The industry has continued to grow. The total pension assets under the Contributory Pension Scheme (CPS) are about N8.7 trillion as at March and we have 8.5 million customers. Acceptance of the scheme has continued as fast as we saw during the commencement of the scheme. There has been some growth and we will like to believe that this will continue.”
The Managing Director, Police PFA, Dr. Hamza Sule Wuro however added that the Federal Government and private sector employers are employing new workers daily and PFAs are opening pension account for the employees.
“For instance, the Federal Government employed 10,000 policemen last year and they opened new accounts with different PFAs.”