About 3.5 million pension accounts opened by workers are not being funded by some state government and private sector companies as of the end of 2020, according to a latest report by the National Pension Commission.
This means there is no income security for the workers affected when they retire and in their old age.
Pencom, in its monthly report of unfunded Retirement Savings Accounts, stated that the total number of workers under the Contributory Pension Scheme (CPS) stood at 9.2 million as of the end of 2020.
“Similarly, the monthly reports indicated that a total of 3.5 million Retirement Savings Accounts had remained unfunded as at the end of Q4 2020,” it said.
“A majority of these unfunded accounts belong to employees of state governments and private sector organisations.”
On its review of monthly reports of RSAs with incomplete documentation, it stated that a review of the monthly reports of the pension operators revealed that 5.1 million RSAs had incomplete documentation as of Q4, 2020.
Nonetheless, it added, the engagement of agents to conduct data recapture on behalf of all the Pension Fund Administrators was expected to address this issue and validate all relevant documents under the profile of individual RSA holders.
PenCom stated that another notable outcome of the monthly reports review was the un-credited pension contributions domiciled in the Contribution Reconciliation Accounts and the Transitional Contributory Funds of the pension operators.
The commission, however, mandated the pension operators to ensure resolution of all outstanding un-credited contributions and file progress reports at regular intervals.
In the fourth quarter of 2020, the commission stated that it conducted off-site review of the implementation of the Contributory Pension Scheme in seven states – Ekiti, Delta, Osun, Lagos, Ondo, Edo and Kebbi.
It stated that emphasis was on the remittance of pension contributions, payment of pensions under the Defined Benefit Scheme, payment of accrued rights as well as the receipt and utilisation of administration fees.
The review noted the gaps in the monthly pension remittances to the RSAs of employees of various states as well as the delay in the payment of accrued rights to retirees.
It stated that there were also issues of inaccurate data on schedules accompanying pension remittances and other reconciliation issues.
The affected PFAs were currently reconciling their records with the state bureaux, PenCom stated