States that have not keyed into the Contributory Pension Scheme (CPS) will lose out on the pension fund scheme, as stakeholders move to block the move by the Nigeria Governors’ Forum (NGF) to dip into the funds.
Out of the 36 states and the Federal Capital Territory (FCT), only 10 states – including the FCT – have implemented the CPS, with 26 states yet to follow suit.
An agreement was reached by the NGF to establish an infrastructure investment fund that will be under the aegis of the Nigerian Sovereign Investment Authority (NSIA), with some of the pension funds channeled into the proposed scheme.
The Director of the Centre for Pension Rights Advocacy, Ivor Takor, said that states that are yet to implement the pension fund scheme should “stay away from anything that has to do with investment of pension funds”.
He said, “I am strongly of the view that pension funds have a strong social connection apart from its economic connection. Pension is an old-age social security.
“The Contributory Pension Scheme (CPS) that accumulated in the pension fund we are all talking about is a product of pension reform in the country, with the Pension Reform Act 2014 being the law.
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“There are several state governments that have not keyed into the Contributory Pension Scheme. Some that have keyed into it are in default of their own laws. These state governments should stay away from anything that has to do with investment of pension funds.
“Let me say with all sense of responsibility that trade unions, the Nigeria Labour Congress and the Trade Union Congress, will not allow any state governments that has not fully keyed into the CPS to eye the fund for any of its investments. They should put their mouths where their hands are. They have no business with pension funds.
“There is nowhere in the communiqueof Nigeria Governors Forum that was issued at the end of its 22nd NGF meeting held on Wednesday 2nd December 2020 where the borrowing of N17 trillion pension fund by the Forum for the development of infrastructure was mentioned.
“What I read in the Communique was that Governor Nasir El Rufai, Chairman of the National Economic Council (NEC) Adhoc Committee on Leveraging Portion of Accumulated Pension Funds for Investment in Nigeria Sovereign Investment Authority (NSIA) briefed the meeting on the proposal. The proposal is to create a National Infrastructure Investment Fund (NIIF) under the auspices of the NSIA.
“The amount proposed to be accessed from pension fund is N2 trillion. The CBN has a similar proposal to access N15 trillion for National Infrastructure funding through INFRACREDIT at a lower interest rate of five percent.
“The communique said the meeting endorsed the two proposals, noting that both were not mutually exclusive and could be adopted simultaneously with one streaming into the other.”
Opposing moves by states that plan to borrow from the pension scheme, the Contributory Pensioners Union of Nigeria (CPUN) said, “Members frowned at the Federal/State Government intention to borrow from Contributory Pension Scheme Fund at the expense of their members retired since last year that are yet to receive their retirement benefits. It is very unfortunate that states that have not queued into the contributing scheme want to reap where they have not sown.”
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