31 states have no insurance cover for employees – PenCom

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Despite the requirement in the Pension Reform Act of 2014, 31 states will have no employee insurance coverage as of March 2021.

The numbers acquired from PenCom “Status of implementation of the CPS in the states as of March 2021” reported that only five states, including the Federal Capital Territory, had insurance coverage for their employees. The states that comply with PenCom regulations with pension plans for their workers are Lagos, Osun, Ondo and Edo.

State of Lagos

Lagos passed a CPS law in 2007, revised several aspects of the main law in 2019 and set up a pension office. Lagos has also registered its employees with PFAs and regularly transfers 10% employer and 8% employee pension contributions. An actuarial valuation was carried out, as was the financing of the employees’ accumulated pension entitlements, but there are arrears. Lagos recently set up a pension fund account with two PFAs for state and local governments.

READ: Report any employer without employee group life insurance – PenCom

Osun state

Osun State passed CPS law in 2008 and has a legitimate group life insurance policy. Retirement benefit accounts Bond repayment funds have been opened at the two established pension offices (state and local governments). Osun has registered its employees with PFAs and pays 7.5% employer and 7.5% employee pension contributions for government employees. However, from May 2019 to July 2020 there is a backlog in pension contributions and the state of Osun has insufficient funding for accrued pension rights. The state has a backlog of unpaid pension contributions and massive arrears.

Ondo state

Ondo State passed CPS law in 2014. It has a legitimate group life insurance policy and has established a pension office. Ondo has also registered its employees with PFAs and transferred 10% employer and 8% employee pension contributions by January 2021. Employees covered by the CPS do not have accrued pension rights in the state of Ondo, so there is no actuarial assessment.

READ: PenCom Looks For Bonds To Pay N400 Billion In Arrears While Retirees Moan

Edo state

In 2010, Edo State passed a CPS law (which was amended in 2017). It has set up a pension office and registered government employees with PFAs, and pays 10% employer and 8% employee pension payments and transfers on time. As of the balance sheet date, the actuarial valuation by Edo was still in progress. Edo is covered by valid group life insurance. The accrued pension entitlements have yet to be funded and the CBN has yet to open an account for the Retirement Benefit Repayment Fund.

What that means

The lack of insurance shows that in ignoring group life insurance, the private sector is basically following in the footsteps of state governments. State governments would ordinarily be expected to comply with the law, but their actions have shown disregard for the law and its employees.

In addition, insurance benefits apply not only to employees, but also to management, i.e. the state. It is designed to ensure that the families of those who work with them are safe, no matter what.



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