FG yet to comply with workers 18% pension contribution
Seven years after the Federal Government amended the Pension Reform Act, which stipulated that employers should remit 18 per cent of workers’ monthly emoluments into their RSAs, the government is yet to comply with its own law. The Pension Reform Act promulgated in 2004 had stipulated that workers and employers should contribute 7.5 per cent each of the monthly emoluments into the workers’ RSAs with their respective Pension Fund Administrators. The amended PRA 2014 mandated all employers under the CPS to raise workers’ pension remittance to 18 per cent. According to the amended law, eight per cent of the workers’ monthly salaries should be the employees’ contribution, while the employers should contribute the remaining 10 per cent. The contributions are kept by the Pension Fund Custodians, administered and invested by the PFAs. The essence is to ensure that the funds continued to increase until the workers retired which would further translate into higher returns on investments and give retirees higher monthly stipends. But while most private sector employers have complied, the Federal Government had continued to remit the old amount of 15 per cent into the workers’ RSAs seven years after.
Leave a Reply