Human Resource (HR) Officers play a vital role in Nigeria's civil service, managing recruitment, staff welfare, performance evaluations, and ensuring compliance with public service regulations. Given their critical responsibilities, it's essential to understand the pension framework that supports them post-retirement.
The Contributory Pension Scheme (CPS)
Introduced by the Pension Reform Act of 2004 and revised in 2014, the Contributory Pension Scheme (CPS) mandates that both employers and employees contribute to a Retirement Savings Account (RSA) for each worker. This scheme replaced the previous Defined Benefit Scheme (DBS), aiming to ensure sustainability and prompt pension payments.
Contribution Structure
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Employee Contribution: 8% of monthly emoluments
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Employer Contribution: 10% of monthly emoluments
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Total Monthly Contribution: 18% of monthly emoluments
These contributions are remitted to the employee's RSA, managed by licensed Pension Fund Administrators (PFAs), who invest the funds to generate returns.
Pension Benefits Based on Grade Levels
The pension benefits for HR Officers vary depending on their grade levels and years of service.
Entry-Level Officers (Grade Level 08–10)
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Monthly Emoluments: ₦55,000 – ₦80,000
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Monthly Contributions: ₦9,900 – ₦14,400
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Estimated RSA Accumulation after 30 Years: Over ₦28 million
Mid-Level Officers (Grade Level 12–14)
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Monthly Emoluments: ₦120,000 – ₦200,000
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Monthly Contributions: ₦21,600 – ₦36,000
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Estimated RSA Accumulation after 30 Years: Over ₦50 million
Senior Officers (Grade Level 15–17)
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Monthly Emoluments: ₦300,000 – ₦500,000
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Monthly Contributions: ₦54,000 – ₦90,000
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Estimated RSA Accumulation after 35 Years: Over ₦100 million
These estimates consider consistent contributions and moderate investment returns over the years.
Retirement Options
Upon retirement, HR Officers have two primary options for accessing their pension funds:
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Programmed Withdrawal: The retiree receives regular monthly payments directly from their RSA, managed by their PFA.
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Annuity Purchase: The retiree uses their RSA balance to purchase an annuity from a life insurance company, ensuring a steady income for life.
Additionally, retirees may receive a lump sum payment, depending on the total RSA balance and the chosen retirement option.
Challenges Faced by Retired HR Officers
Despite the structured nature of the CPS, several challenges persist:
Delayed Access to Pension Funds
Many retirees experience significant delays, sometimes exceeding a year, before accessing their pension funds. This delay is often due to the government's failure to remit its portion of the contributions promptly.
Non-Remittance of Contributions
Instances where employers, including government entities, fail to remit their share of contributions to PFAs have been reported. This non-compliance hampers the timely disbursement of retirement benefits.
Lack of Periodic Pension Reviews
The law stipulates that pensions should be reviewed every five years or in line with salary reviews. However, the government has failed to implement these reviews, leading to diminished purchasing power for retirees.
Inequities in the System
Certain high-ranking officials, such as Heads of Service and Federal Permanent Secretaries, have been exempted from the CPS, receiving full salaries for life. This exemption has raised concerns about equity and fairness within the pension system.
Recommendations for Improvement
To enhance the pension experience for HR Officers:
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Ensure Timely Remittance: Government agencies must remit their share of contributions promptly to PFAs.
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Implement Periodic Reviews: Regularly review pension amounts to reflect economic realities and inflation.
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Strengthen Oversight: PenCom should enforce compliance among employers to prevent non-remittance issues.
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Promote Financial Literacy: Educate civil servants on financial planning to prepare adequately for retirement.
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Address Systemic Inequities: Re-evaluate exemptions to ensure fairness across all levels of the civil service.
Summary Table: Pension Overview for HR Officers
| Grade Level | Monthly Emoluments (₦) | Monthly Contributions (₦) | Estimated RSA Accumulation (₦) |
|---|---|---|---|
| 08–10 | 55,000 – 80,000 | 9,900 – 14,400 | Over 28 million |
| 12–14 | 120,000 – 200,000 | 21,600 – 36,000 | Over 50 million |
| 15–17 | 300,000 – 500,000 | 54,000 – 90,000 | Over 100 million |
Conclusion
Human Resource Officers are integral to the Nigerian civil service, ensuring efficient personnel management and organizational effectiveness. While the Contributory Pension Scheme offers a structured approach to retirement planning, addressing existing challenges is crucial. By implementing timely remittances, regular reviews, and ensuring equity, the government can uphold its commitment to the welfare of its dedicated civil servants.
