Oyo State Defends New Pension Scheme, Assures Workers of Predictable Retirement

Oyo State Governor Seyi Makinde's administration is moving forward with a Contributory Pension Scheme (CPS) for civil servants hired from 2025, a move defended as essential for a sustainable and predictable retirement system. The state's Commissioner for Information, Dotun Oyelade, addressed concerns from workers, emphasizing that the decision aligns with recommendations from the National Pension Commission.

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The Contributory Pension Scheme was introduced as a more sustainable alternative to the old Defined Benefit Scheme, which many states have found difficult to maintain.

Oyelade explained that enrolling new recruits first allows them to contribute over a longer period, building substantial retirement savings. He highlighted the CPS as a more viable alternative to the old Defined Benefit Scheme, which many states struggle to fund. While Oyo State has settled its pension obligations up to 2021, other states still grapple with arrears dating back years, illustrating the old system's unsustainability.

Dismissing claims that the government is shirking responsibility, Oyelade asserted that Oyo State remains committed to its workers' welfare. Under the CPS, the government will continue its statutory contributions as mandated by law. He assured that pension deductions are legally required to be remitted within seven days of salary payment, and the current administration has a track record of prompt remittances.

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The government is not abdicating its responsibility. Under the CPS, the government will continue to make its statutory contributions as required by law.

Furthermore, Oyelade stressed the transparency of the CPS, noting that each worker owns and can access their Retirement Savings Account. The scheme's legal and regulatory framework, overseen by the National Pension Commission (PenCom), provides accountability and ensures continuity beyond any single administration. He expressed confidence in Governor Makinde's commitment to civil servants, citing his consistent payment of salaries for over seven years.

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The law mandates remittance of contributions within seven days of salary payment, adding that the current administration has demonstrated its commitment to complying with the law and ensuring prompt remittance of both workers’ and government’s contributions.