Connect with us

Economy

Criminalise defaulter firms in contributory pension scheme – expert

Published

on

Criminalise defaulter firms in contributory pension scheme – expert

Pension
By Simon Akoje
Lagos, Feb. 21, 2019 An Economist, Mr Titus Okuroumu, has advised the Federal Government to make it a criminal offence for any eligible firm to refuse to take part in the contributory pension scheme.

 

Okuroumu, a former Director in the Central Bank of Nigeria (CBN), made the suggestion in an interview with the News Agency of Nigeria in Lagos on Thursday.

The economist said the suggestion was imperative because many firms were in the guise of operating under the scheme, but were diverting the lump sums to their private use.

Okuruoumu was reacting to a statement by the National Pension Commission (NPC) that only 8.41 million out of the 70 million working population in Nigeria were contributing to the scheme.

NNN reports that Mrs Aisha Dahir-Uma, the Director-General of NPC, said the 8.41 million contributors constituted about 12.09 per cent of the country’s working population.

The 8.41 million contributors when compared to the entire population of over 180 million people are just about 4.29 per cent.

Dahir-Umar gave these figures to an Ad-hoc Committee of the House of Representatives set up to investigate activities of the commission.

Okuruoumu said the figure was abysmally low when compared to the 70 million working population.

The economist said that the Federal Government should implement the 2014 Pension Reform Act faithfully to identify areas that needed improvement.

He said that the regulators needed to enforce the 2014 Reform Act to shore up the numbers of workers in the contributory pension scheme.

According to him, many firms are diverting workers’ contributions, especially those in the private sector.

“The government should criminalise such fraudulent diversions and conversions of workers’ retirement savings.

“This approach will overtime check such diversions, thereby leading to a huge sum in the scheme.”

He also called for the extension of the scheme to the informal sector to increase the percentage of the people in the system.

“We have a huge number of workers in the blue collar space that need pension cover.

“Incorporating the sector will surge the percentage of people in the scheme and their contributions will be a buffer to the economy,” he said.

The Contributory Pension Scheme commenced in 2004 with the key objectives of  assisting workers to save to cater for their livelihood during the old age.

It established a uniform set of rules and regulations for the administration and payment of retirement benefits in both the public and private sectors.

The commission said that total pension fund assets had grown to N8.63 trillion as of December 2018 with average monthly contributions of N29.15 billion.

It said that the total pension asset is currently equivalent to 7.40 per cent of the Gross Domestic Product of the country.
STA/JI/TA
Editing by Joseph Idika/Tajudeen Atitebi

© 2019 NNN NEWS NIGERIA. EDITOR@NNN.COM.NG