Pension Liabilities of 20 States Hit N200bn

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Twenty  out of the thirty-six states of the federation owe their workers and retirees about N200 billion pension liabilities, investigations have revealed.

This is even as about 28 states have been struggling to adopt the new pension scheme. While most of the states owe between one and three years pension arrears as a result of financial crunch which affected their inability to pay salaries and pensions, only few states owe between two and 10 months pension entitlements.

Investigations by our correspondent revealed that each of the states owes between N500 million and N1 billion pensions on a monthly basis, amounting to about N10 billion annually in some of the states that owed between one to three years pension arrears.

This, translates to about N200 billion for the 20 states, while market observers believe the figure could be more, with some states owing up to three years pension arrears. The aforementioned amount is arrears owed under the Defined Benefits Scheme (DBS) and the Contributory Pension Scheme (CPS).

Some of the affected states are Benue, Kogi, Abia, Oyo, Ondo, Osun, Imo, Bayelsa, Delta, Nasarawa, Niger, Taraba, Zamfara, Ekiti, among others. To this end, ex-workers of the affected states who have now retired are subjected to hardship after retirement as their pensions are not forthcoming as expected.

Responding to this development, the president of Pension Fund Operators of Nigeria (PenOp), Mr. Eguarekhide Longe who is also the managing director of AIICO Pension managers, urged state governments to prioritise the payment of pension of their workers.

Noting that this will provide a secured future for their employees when they retire, he appealed to states that are yet to fully key into the new pension scheme to do so, saying transparency and accountability as enshrined in the CPS makes it the best pension system to adopt.

Earlier, the director of Centre for Pension Right Advocacy, Mr. Ivor Takor, while charging states governments to perform their civic responsibilities by honoring pension obligations of their employees, said most illiquid states have suspended pension budget for now and are, instead, paying salaries without remitting the employer’s monthly pension contributions into their workers Retirement Saving Accounts (RSAs).

Takor,  a former board member of the National Pension Commission (PenCom), said the pension liabilities of some states are so huge that even if situation improves, it was going to be difficult to offset them, even as he wondered why some states could owe two to three years pension arrears.

He added that it was unfortunate that some state governors left office and made some segmented pension laws that only covered them and their office holders, some of them drawing massively from the purse of the state in the name of pension to build houses and buy cars without making laws for the state workers. “This is very bad, it is immoral and it should be addressed by current governors”, he advised.

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