The Lagos State Governor, Akinwunmi Ambode, has said that the Pension Reform Act and the Contributory Pension Scheme have been beneficial to the government by supporting economic reforms and stopping the growth of pension liabilities in the country.
Ambode said this while reiterating state government’s full commitment to pension reforms at the opening session of a training with the theme: ‘Implications of the PRA 2004’ for officers of the Lagos State Pension Commission and public servants.
He said, “Aside from the law’s potential to promote national savings and by implication, economic growth, funded pension schemes have the capacity to promote capital market development. Moreover, it is often argued that funded schemes have the capacity to promote economic reforms generally.
“Another area in which the government stands to benefit from the law is through the scheme’s ability to support the overall macroeconomic policies of reform.”
The governor, who was represented by Commissioner for Establishments, Training and Pensions, Dr. Akintola Benson, said the CPS would also impose fiscal discipline on the budgetary process because pension obligations would be accurately determined.
According to him, the provisions of the law have also encouraged labour market flexibility, while pensioners are no longer at the mercy of their previous employers.
He said the training was to ensure that LASPEC officers could effectively discharge their duties and the generality of the public service could adequately prepare for the future.
The governor noted that the Act as implemented in Lagos State had boosted the welfare of workers and pensioners in the state.
He added that it had allowed the maintenance of a Retirement Savings Account by each employee, which gives the workers responsibility over their retirement savings, and that pensioners would no longer be at the mercy of employers.
Ambode said that workers could choose how to allocate their retirement savings and diversify their investments over a range of instruments.
The governor stated that personal accounts would provide all workers a higher rate of return than could be paid under the direct benefit plan, adding that this approach would afford participants an opportunity to pass wealth to their survivors in the event of death.
“The state government has never failed to remit monthly contributions into the RSAs of workers, and as of March, 2017, about N78.592bn had been credited to employees’ accounts maintained by our 10 Pension Fund Administrators,” Ambode added.