Employees of Ondo state civil service are heaving a sigh of relief following the state governments adoption of a 10% contributory pension scheme under the new Pension Reform Act.
In 2014, the federal government of Nigeria repealed the Pension Reform Act of 2004 and introduced a new Pension Reform Act to govern and regulate the administration of the contributory pension scheme for both the public and private sectors in the country. Part of the aim was also to address some shortcomings in the repealed Act that created a room for stealing, leading to non-payment or delay of pensions and gratuities.
Under the new scheme, both employer and employee are required to make a minimum of 10% and 8% respectively of the employees monthly emoluments. This compares with a minimum of 7.5% of the employees monthly emoluments required by both parties under the repealed Act.
The increase in the rate of contribution to the scheme led Governor Oluwarotimi Akeredolu SAN, of Ondo State, to budget N20 million monthly to compensate for the differences, in a show of his commitment to the welfare of workers in the state.
Previously in Ondo state, getting pensions after decades of service to the state was not a piece of cake. Delays and non-payment of pensions were the tales of nearly every retiree in the state, with several losing their lives without having to spend the portion of their emoluments kept with the government.
The hassle is not unconnected to the fact the government waits until retirement before sourcing for pensions. But with the new contributory scheme which the Ondo state government keyed into, the portion of workers' salaries deducted monthly as pension contribution is now being managed by registered pension fund administrators in the country.
In simple terms, once workers' deductions are made, the money does not reside with the government but moves straight to pension fund administrators, and the government would not have to wait until workers retirement before they could start sourcing pension funds.
The new scheme is a cashless scheme that makes operation easy both for the government and the workers. Everything is done seamlessly without any political bias, but rather with the commitment of each government in each state and their belief in workers welfare. In Ondo state, employees of the state civil service have been enjoying the contributory scheme under the leadership of Governor Oluwarotimi Akeredolu SAN.
Meanwhile, this administration has fulfilled its obligation to the law by paying up to date the group life policy for workers contributory scheme. As at January 2020, all workers under a contributory pension scheme have life insurance, implying if anything happens to any of the workers, their family gets three times of their annual payment, excluding their pension funds.
All these efforts, including the funding of pension under both schemes, are geared towards the good people of Ondo state in spite of the heavy debt incurred by the previous administration. In fact, Governor Akeredolu has judiciously paid the backlog pension owed by the previous government.
According to Mr. Olowosuko Jideola, the Director General of Ondo State Pension Commission, in an interview said, during one of the quarterly meetings of the National Pension Commission in 2019, the pension regulator adjudged Ondo state as the second best in the country in terms of effectiveness in the payment of workers pensions. Making another attestation of Akeredolus good leadership.
Also to ensure quality service delivery, the Ondo Pension Commission meets with all directors of finance, Administrators and all directors of account in the state, to intimate them on the latest development and what they need to do. It is now compulsory for all recruits into the states civil service to register under a contributory pension scheme.
For clarity, a minimum of 8% of employees monthly basic, housing and transport allowances is deducted from employees salaries, while the government pays a minimum of 10% of the same.
Furthermore, workers are requested to send in their notice six months before retirement and for other documentation, then the Director of Finance will look into it and then forward to the national pension commission, and if every documentation required becomes ready in a month the retiree gets his pension which makes it easier for people unlike the old scheme.
Akeredolu as the governor of Ondo state in the last three years, has kept his promises and has been committed to workers welfare.
