According to the reports: "The Congresses of our Great Unions (ASUP & COEASU) have resolved that the leadership of CASUOSTI should go ahead and sign the draft Agreement with the State Government and suspend the strike action. Consequently, the strike is hereby suspended with immediate effect."
"We hope that Government would be faithful to the Agreement and ensure timely implementation of all the major clauses therein."
Therefore, CASUOSTI has directed all academic staff members in Osun State owned tertiary institutions to resume work immediately. We also call on our Students to come back to school without any further delay."
The state government has addressed some of their demands which includes the retirement age and contributory pension scheme.
CLARIFICATION ON CONTRIBUTORY PENSION SCHEME AND
CASUOSTI’S DEMAND FOR ITS SUSPENSION IN OSUN STATE
Suspension of Contributory Pension Scheme (CPS) is one of the yet-to-be-resolved demands leading to the ongoing strike action by lecturers in Osun State Polytechnics and Colleges of Education. This article clarifies this particular issue and the bases of the resolution and demand of our Unions.
The CPS has three major components. These are: (1) Retirement Benefit Bond; (2) Group Life Assurance; and (3) Employee-Employer’s Monthly Contribution. The CPS began in Osun State in May, 2010 (exactly 47 months ago!). The following facts reveal how haphazard, irregular, unlawful and potentially destructive the Scheme is. None of the three components of the Scheme is properly and timely carried.
1. Retirement Benefit Bond (RBB)
The RBB incorporates the accumulated benefits of the employee from the date of appointment up till the time the Contributory Pension Scheme (CPS) was introduced. It applies to those employees who are still in service and had been in service before the introduction of CPS. The Law provides that Government should issue them bond in the value of their benefits prior to commencement of CPS. The calculation of the employee’s benefit (i.e. actuarial valuation) ought to have been done by Government and agreed to by every individual employee before, or, at the commencement of the CPS. Although the bond is not convertible to spendable cash while the beneficiary is still in service, it is expected to yield interest and thereby appreciate significantly before the employee’s retirement. UNFORTUNATELY, up till this moment, Osun State Government is yet to perfect the process of determining the value of the RBB and accruable interest, not to talk of guaranteeing the provision of funds for its redemption as and when due.
2. Group Life Assurance
The Group Life Assurance aspect of the CPS applies to any employee who dies in service. It provides a compensation for the next-of-kin of the deceased, without prejudice to the supposed retirement benefits of the latter. The Pension Reforms Act upon which the CPS is based, stipulates that the employer shall maintain a life insurance policy for the employee to the tune of AT LEAST (not necessary limited to) three times the annual salary of the employee. UNFORTUNATELY, this requirement of the CPS is yet to be fulfilled by Osun State Government. Even if its rumored actualization is authentic, the questions are, does it take effect since the commencement of the CPS? Is there guarantee that the State Government would be able to fund the policy? It is an insurance policy for which premium has to be paid EVERY YEAR for the renewal; otherwise, an employee who dies within a year of non-renewal may have difficulty in making claims.
3. Employee-Employer’s Monthly Contribution
The Law stipulates that 7½% of the employee’s salary should be deducted at source on a monthly basis. The employer (i.e. Government) should add another 7½% to make 15%. The contributions are to be remitted inseparably to the employee’s Retirement Savings Account (RSA) within 7 days after payment of salary. The Law further provides that where the remittance of the contributions is done later than 7 days after payment of salary, the employer shall be liable to a fine of 2% continually until the remittance is done! (See Pension Reforms Act 2004 cf. Osun State Pension Reforms Act 2009). UNFORTUNATELY, while the State Government has constantly deducted employees’ contributions, remittance of both employee’s and employer’s contributions to individual RSAs has been irregular, piling up to several outstanding months and beset, in some cases, with fatal arithmetic errors. Imagine the irreversible loss we have sustained! In the first place, our salary is amputated (90%), meaning we are short-changed in Pension contributions. Worse still, we forfeit huge profits that our RSAs should be generating, since the money does not get there according to the stipulation of the Law backing the CPS.
Our Demands
During his meeting with us on Wednesday, 16th April, 2014, our amiable Governor (the Ogbeni himself) openly declared that remittance of our Pension contributions is delayed so long because Osun State does not have money to pay the counterpart fund. He added that the State cannot even afford the Bond because it is so indigent. So, where do retirees go for their retirement benefits when their Pension contributions are not fully and timely remitted to their Retirement Savings Accounts (RSAs)? Where do they go for their benefits when Retirement Benefit Bond (covering years of service prior to commencement of CPS) is not in place?
We hereby submit that the State Government should suspend the CPS for now, pending the time all the ravaging irregularities are redeemed. The lingering inconsistencies in the almost four-year old administration of the Contributory Pension Scheme are beyond teething problems and portend harmful consequences to us. The continued irregularities defile the agreement signed with us by Government prior to the suspension of the last strike action.
It is the opinion of our Congresses that the Scheme as commenced in May, 2010 is still-birth. Specifically, we demand that our employees’ contributions up to date should be refunded while the old Pension scheme should be applicable to all staff who retire until Government is able to: (a) conclude the process for actualization of Retirement Benefit Bond;(b) actualize Group Life Assurance and guarantee continuous renewal of the policy; and (c) perfect the process of remittance of retirement contributions to RSAs within 7 days after payment of salary, as stipulated by Law.
We refuse to be used for inimical pilot study for this gruesome scheme. Osun State Government has NOTHING to lose by suspending the Contributory Pension Scheme albeit until machineries are put in place for implementation as prescribed by Law.... As decided by our Congresses, the strike action will continue until this demand and the other demands (i.e. 65-year retirement age, employment of more staff, implementation of full CONPCASS, timely payment of salary and deductions) are met.
April, 2014
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