Examining Contributory Pension Scheme Implementation Status In Nigeria

Prior to the enactment of the Pension Reform Act 2004 17 years ago, pension schemes in Nigeria was seen as an unattractive scheme as it was marred with many problems. The Public Service operated an unfunded Defined Benefits Scheme and the payment of retirement benefits were budgeted annually.

The annual budgetary allocation for pension was often one of the most vulnerable items in budget implementation in the light of resource constraints. In many cases, even where budgetary provisions were made, inadequate and untimely release of funds resulted in delays and accumulation of arrears of payment of pension rights. It was obvious therefore that the Defined Benefits Scheme could not be sustained.

In the private sector on the other hand, many employees were not covered by the pension schemes put in place by their employers and many of these schemes were not funded. Besides, where the schemes were funded, the management of the pension funds was full of malpractices between the fund managers and the Trustees of the pension funds.

Accordingly, this scenario necessitated a re-think of pension administration in Nigeria by the administration of President Olusegun Obasanjo which initiated a pension reform in order to address and eliminate the problems associated with pension schemes in the country. The outcome of the reform was the enactment into law of the Pension Reform Act 2004 which led ti the establishment of the National Pension Commission (PenCom) as the body to regulate, supervise and ensure the effective administration of pension matters in Nigeria. The functions of the Commission include: Regulation and supervision of the Scheme established under the Act.

Since then till now, the Commission places huge importance on sustainable growth of the Pension Industry through the expansion of coverage of the Contributory Pension Scheme.

The Pension Reform Act (PRA) 2014 expanded coverage of the CPS to the self-employed and persons working in organizations with less than three employees as  this category of workers constitute the larger percentage of the working population in the country leading to the launching of the Micro Pension Plan (MPP) on March 28, 2019 by President Muhamadu Buhari.

Obviously,  there is no doubt that to achieve the Pension Industry’s strategic objective of covering 30% of the working population in Nigeria under the CPS by the end of 2024, all efforts should be on deck to extend coverage to this important segment of the Nigerian economy. In addition, due to their widely dispersed nature and generally low and irregular incomes, there is need to provide a pension plan that would meet their special characteristics.

It was based on this understanding that the Micro Pension Plan initiative was conceived within the context of an industry wide strategy to bring this class of workers on board.

In implementing this initiative, the informal sector has been segmented into three broad categories namely the low income earners, the high income earners and the Micro, Small and Medium Enterprises (MSMEs). Each of these categories, according to the Act, is targeted with appropriate pension products and sensitization programmes that meet their peculiarities backed-up with robust technological platform that  support the provision of customer services necessary to effectively and efficiently register, collect contributions, provide Retirement Savings Account support, pay benefits and provide financial advisory services to this class of workers.

For efficiency and effectiveness, a department has been established in the Commission to drive the implementation of the Micro Pension Plan.

In order to ensure proper participation in the state and local government levels, registration of Micro Pension Participants and employees of the States & Local Governments have been prioritized for a sustained drive to increase participation of the Organised Private Sector through various initiatives and enforcement mechanisms.

A snapshot of Registrations under the CPS and Status of Implementation by States and Local Governments as at 31 March 2021 revealed that a total of 9,383,204 RSAs were registered as at June 2021.

During the period under review, a total of 69,310 Micro Pension Contributors have been registered.

According to the National Pension Commission (PenCom), as at first quarter 2021, 25 states of the federation had enacted pension laws on the CPS while seven states are at the bill stage and out of the five states operating other pension schemes, four states have adopted the Contributory Defined Benefits Scheme (CDBS), while one, (Yobe State) operates the Defined Benefits Scheme (DBS).

Difference between the Defined Benefit Scheme (DBS) and Contributory Defined Benefit Scheme (CDBS)

Employer-sponsored retirement plans are divided into two major categories: Defined Benefit Scheme (DBS) and Contributory Defined Benefit Scheme (CDBS). As the names imply, a Defined Benefit Scheme (DBS)—also commonly known as a traditional pension plan—provides a specified payment amount in retirement. A Contributory Defined Benefit Scheme (CDBS) allows employees and employers (if they choose) to contribute and invest funds over time to save for retirement.

These key differences determine which party—the employer or employee—bears the investment risks and affects the cost of administration for each plan.

According to PenCom, states paying pension under the contributory pension scheme include; Lagos; Osun; Kaduna; Delta and the Federal Capital Territory (FCT), while states remitting employers and employees pension contributions are Lagos; Osun; Kaduna; Delta; Ekiti; Ondo; Benue; Anambra and Federal Capital Territory.

Below is the Contributory Pension Scheme (CPS) implementation status by various states in Nigeria in a zone by zone basis: North-Central Zone, North East Zone, North West Zone, South-South, South-East and South-West Zones.

North-Central Zone

Benue

Enacted Law on the CPS in May 2019; established a Pension Bureau; commenced registration of employees with the PFAs;  started remitting 10% employer & 8% employee Pension Contributions for employees of all the 23 Local Government Councils; began remitting 10% employer & 8% employee Pension Contributions for three Tertiary Institutions and other Agencies.

The state is yet to conduct an Actuarial Valuation; yet to open a Retirement Benefits Bond Redemption Fund Account;  yet to commence funding of Accrued Pension Rights and yet to institute a Group Life Insurance Policy .

FCT

The Federal Capital Territory is covered by Pension Reform Act 2014 making it compulsory for compliant.

To this end, FCT has established two Pension Bureaus – Federal Capital Territory Agencies FCTA & Area Councils; it has registered employees with the PFAs; ensure remittances of pension contributions up to March 2021 of the FCTA and LEAs, (but irregular for some Area Councils). Rate of contribution is 10% employer and 8% employee.

The FCT has also carried out an actuarial valuation; opened a retirement benefits bond redemption fund account; ensures regular funding of Accrued Pension Rights for both the FCTA and Area Councils and operates valid Group Life Insurance Policy for the FCT Area Councils and LEAs

Kogi

Enacted Law on the CPS in 2018 and established a State Pension Bureau. The state is yet to register employees with the PFAs; yet to commence remittance of Pension Contributions; yet to conduct an Actuarial Valuation; yet to open a Retirement Benefits Bond Redemption Fund Account; yet to commence funding of the Accrued Pension Rights and yet to institute a Group Life Insurance Policy.

Kwara

Presented a Bill on the CPS to the State House of Assembly in 2016

Nasarawa

Enacted a Law on the CPS in 2009 (currently in the process of amending the law to commence CPS implementation) and recently constituted the Nasarawa State House of Assembly Ad hoc Committee on Pension Review.

The State is yet to establish a Pension Bureau; yet to register the employees with PFAs; yet to conduct an Actuarial Valuation; yet to open a Retirement Benefits Bond Redemption Fund Account; yet to commence funding of the Accrued Pension Rights and yet to institute a Group Life Insurance Policy.

Niger

The State has enacted a Law on the CPS in 2006 and suspended implementation of the CPS in April 2015 but amended its Law in 2017 to extend its transition period to exempt some employees from the CPS.

It has also established a Pension Bureau; registered the employees with PFAs; resumed deduction of 10.5% employer and 7.5% employee pension contributions in June 2020 but remitted for only June and July 2020. Currently deducting employer and employee pension contributions but not remitting same to employee RSAs.

The State has also opened a Retirement Benefits Bond Redemption Fund Account with two PFAs but yet to remit backlog of employer and employee pension contributions to employee Retirement Saving Accounts (RSAs).

The state is yet to conduct an Actuarial Valuation; yet to commence funding of the Accrued Pension Rights and yet to institute a Group Life Insurance Policy.

Plateau

The state drafted a new Bill on the CPS this year to incorporate the Commission’s observations and comments on the 2020 Draft Bill. The Bill has passed first reading at the State House of Assembly.

North-East Zone

Adamawa

In 2013 the Adamawa State Government enacted law on the CPS and recently drafted the Adamawa State Contributory Pension Scheme (CPS) Bill 2020, which seeks to establish a scheme similar to Contributory Defined Benefits Scheme (CDBS) in the State.

The state is yet to establish a Pension Bureau.

The 2013 Law does not provide for appointment of PFAs, while the 2020 Bill proposed the custody of pension funds by a Board of Trustees instead of PFCs.

The State is yet to commence remittance of Pension Contributions into the employees’ RSAs; yet to conduct an Actuarial Valuation; yet to open a Retirement Benefits Bond Redemption Fund Account; yet to commence funding of the Accrued Pension Rights and yet to institute a Group Life Insurance Policy.

Bauchi

Drafted a Bill on the Contributory Defined Benefits Scheme (CDBS) in 2015 and recently constituted a committee to guide the process of implementing the CPS and other reforms needed in pension administration in the State.

Borno

The State Drafted a Bill on the CPS in 2012 and forwarded a copy to the National Pension Commission (PenCom) for review. The Commission had communicated its observations on the Bill to the State in May 2012.

It is yet to enact a State Pension Law on the CPS.

Gombe

The State has enacted a Law on the CPS in 2008 but amended the 2008 Law on the CPS to CDBS Law in January 2019.

It is yet to establish a Pension Bureau; yet to commence remittance of Pension Contributions and yet to conduct an Actuarial Valuation.

Taraba

This State has enacted a Law on the CPS in 2009 but yet to establish a Pension Bureau; yet to register the State employees; yet to commence remittance of pension contributions; yet to conduct an Actuarial Valuation.

It is yet to open a Retirement Benefits Bond Redemption Fund Account; yet to commence funding of the Accrued Pension Rights and yet to institute a Group Life Insurance Policy.

Yobe

Yobe State is operating the Defined Benefits Pension Scheme (DBS). However, a Committee has been inaugurated on the Adoption of the CPS in February 2020

North-West Zone

Jigawa

The State has enacted law on the CDBS in 2005 and further amended the law in 2015 and has established a Pension Bureau.

It has started remitting 17% employer & 8% employee pension contributions under the Contributory Defined Benefits Scheme to 10 selected PFAs (Remitted employee and employer pension contributions for December 2020 to March 2021).

The State is yet to remit backlog of employee and employer pension contributions for May 2020 to November 2020. It has Conducted an Actuarial Valuation as at December 2018.

Kaduna

Amended its Law on the CPS in 2016 and further amended it in 2020 as well as established a Pension Bureau.The State has registered its employees with PFAs and commenced remitting Pension Contributions but reduced the employer’s rate of contributions from 13% to 8% via the 2020 amendment.

The 7% existing employee pension contribution rate had nonetheless been retained; conducted an Actuarial Valuation; opened a Retirement Benefits Bond Redemption Fund Account with the Central Bank of Nigeria (CBN); ensures funding Accrued Rights consistently with 5% of the total monthly wage bill.

The State has replaced the Group Life Insurance with a Sinking Fund, which is domiciled with the CBN and the State has commenced setting aside funds in the account for settlement of death benefits. The State has huge arrears of Accrued Pension Rights.

Kano

Kano State has enacted a Law on the CDBS in 2006, hence implementing the Contributory Defined Benefits Pension Scheme. Deductions of pension contributions are under the management of a Board of Trustees instead of the PFAs.

Kano State is yet to establish a State Pension Bureau; yet to transfer pension assets to a Licensed Pension Operator; yet to conduct an Actuarial Valuation; it has huge pension and gratuity liabilities.

Katsina

The State has drafted a Bill on the Contributory Defined Benefits Pension Scheme (CDBS) in 2017.

Kebbi

It has enacted a Law on the CPS in 2009 (amended some sections of the Law in 2014); established a Pension Bureau and registered its Employees with PFAs.

The state is remitting only 7.5% employee Pension Contributions. It is yet to conduct an Actuarial Valuation; yet to open a Retirement Benefits Bond Redemption Fund Account; yet to commence funding of the Accrued Pension Rights; yet to institute a Group Life Insurance Policy.

Employees covered under the CPS being retired into the DBS as a result of failure to remit employer pension contributions.

Sokoto

The State enacted Law on the CPS in 2007 but yet to register its employees with the PFAs; yet to commence deduction and remittance of pension contributions.

It is yet to conduct an Actuarial Valuation; yet to open a Retirement Benefits Bond Redemption Fund Account; yet to commence funding of the Accrued Pension Rights; yet to institute a Group Life Insurance Policy and yet to establish a Pension Bureau.

Zamfara

Zamfara State in 2019 repealed the Law on CPS and enacted a Law on the CDBS and has commenced remitting only the 7.5% employee pension contributions prior to enacting the CDBS Law but stopped remitting with the enactment of the CDBS Law.

The State is yet to establish a Pension Bureau to drive the CDBS; yet to commence deduction and remittance of pension contributions under the CDBS. Remittances made under the CPS currently being refunded to the employees. It is yet to conduct an Actuarial Valuation.

South-South Zone

Akwa Ibom

Bill on the CPS is undergoing legislative processes.

Bayelsa

Bayelsa State in 2009 enacted a Law on the CPS and established two Pension Bureaus (State & Local Governments). Recently the State inaugurated a committee on the implementation of the CPS but yet to register the State Employees.

The State is yet to commence remittance of Pension Contributions; yet to conduct an Actuarial Valuation; yet to open a Retirement Benefits Bond Redemption Fund Account; yet to commence funding of the Accrued Pension Rights and yet to institute a Group Life Insurance Policy for its employees.

Cross River

The State drafted a Bill on the CPS in 2012 but yet to enact the Bill into a Law.

Delta

This State enacted a Law on the CPS in 2008 (amended the Law in 2011). It has established two Pension Bureaus (State & Local Governments) and registered the Employees with PFAs.

The State has also commenced remitting 10% employer & 7.5% employee pension contributions (remitted pension contributions up to October 2020 for employees of the Local Governments and up to February 2021 for employees of the State).

The State has Carried out Actuarial Valuation; opened Retirement Benefits Bond Redemption Fund Accounts with the CBN; provides funding for the Accrued Pension Rights of the employees.

The State has huge arrears of Accrued Pension Rights and yet to institute a Group Life Insurance Policy.

Edo

The State enacted a Law on the CPS in 2010 (amended the Law in 2017) and established a Pension Bureau.

It has registered the State Employees with PFAs and commenced remitting 10% employer & 8% employee pension contributions and remittances are up to date.

As of March this year, the State conduct of Actuarial Valuation is still ongoing.

Edo State has valid Group Life Insurance Policy but has not commenced funding of the Accrued Pension Rights and yet to open a Retirement Benefits Bond Redemption Fund Account with CBN.

Rivers

This State repealed its Pension Reform Law 2009 and re-enacted a Pension Law in 2019 with a transition period which ended in July 2019.

It has established a Pension Bureau; registered its employees with PFAs and remitted 7.5% employer and 7.5% employee pension contributions under the repealed law. Whereas the Employer contributions stopped in 2016, while the employee contributions stopped in 2019. The contributions under the repealed law are now being refunded. Although employee contributions have commenced under the new law, employer contributions are yet to commence.

The State has conducted Actuarial Valuation; opened a Retirement Benefits Bond Redemption Fund Account with a PFA, in line with the State Pension Law but yet to commence regular funding of the Retirement Benefits Bond Redemption Fund Account and yet to institute a Group Life Insurance Policy for its employees.

South-West Zone

Ekiti

Ekiti State in 2010 enacted a Law on the CPS and amended the pension law in 2017. It has established a Pension Bureau; registered its employees with PFAs; remitted 10% employer & 8% employee Pension Contributions up to September 2020 and carried out an Actuarial Valuation.

The State also opened a Retirement Benefits Bond Redemption Fund Account with the CBN but yet to commence funding of the Accrued Pension Rights and yet to institute a Group Life Insurance Policy.

Lagos

The State has enacted a Law on the CPS in 2007 and amended some sections of the Principal Law in 2019.

It has also established a Pension Bureau; registered its employees with PFAs and ensures regular remittance of 10% employer & 8% employee pension contributions.

The State has conducted an Actuarial Valuation; provides funding for the employees’ Accrued Pension Rights but has arrears and recently opened Retirement Benefits Bond Redemption Fund Account with two PFAs for the State & Local Governments. It has valid Group Life Insurance Policy.

Ogun

Ogun State enacted a Law on the CPS in 2008 (amended the Law in 2013 to extend its transition period to 2025). It has established two Pension Bureaus (State & Local Governments).

The State has registered its employees with PFAs; commenced deduction of 7.5% employer & 7.5% employee Pension Contributions but stopped remitting same since 2015.

The State is yet to resume remittance of pension contributions into the Retirement Savings Accounts of the State and Local Government Councils employees despite effecting deductions from the employees’ salaries.

The State has arrears of Accrued Pension Rights; yet to conduct an Actuarial Valuation; yet to open a Retirement Benefits Bond Redemption Fund Account; yet to commence funding of the Accrued Pension Rights and yet to institute a Group Life Insurance Policy.

Ondo

This State enacted a Law on the CPS in 2014; established a Pension Bureau; registered its Employees with PFAs and commenced remitting 10% employer & 8% employee pension contributions up to January 2021.

The State has valid Group Life Insurance Policy but yet to conduct Actuarial Valuation as employees covered under the CPS do not have Accrued Pension Rights.

Osun

The State in 2008 enacted a Law on the CPS and went ahead and established two Pension Bureaus (State & Local Governments) as well as registered its employees with PFAs.

It also commenced remitting 7.5% employer & 7.5% employee Pension Contributions up to December 2020 for the State employees with backlog of pension contributions from May 2019 to July 2020.

The State has conducted an Actuarial Valuation; has valid Group Life Insurance Policy; opened Retirement Benefits Bond Redemption Fund Accounts with the CBN.

The State is faced with inadequate funding of Accrued Pension Rights and backlog of unremitted pension contributions and huge arrears of Accrued Pension Rights.

Oyo

This State has enacted a Law on the CPS in 2010 and forwarded a Bill in 2018 to amend the Principal Law  to PenCom and the Commission had since communicated its observations on the review of the draft amendments to the State.

The State is yet to establish a Pension Bureau; yet to register its employees with PFAs; yet to commence remittance of Pension Contributions; yet to conduct an Actuarial Valuation; yet to open a Retirement Benefits Bond Redemption Fund Account; yet to commence funding of the Accrued Pension Rights and yet to institute a Group Life Insurance Policy.

South-East Zone

Abia

In 2017, Abia State Government enacted Law on the CPS but yet to establish Pension Bureau; yet to register the State Employees with PFAs; yet to commence remittance of Pension Contributions and  yet to conduct an Actuarial Valuation.

The State has not opened a Retirement Benefits Bond Redemption Fund Account; yet to commence funding of the Accrued Pension Rights and yet to institute a Group Life Insurance Policy.

Anambra

The State has enacted a Law on the CPS in 2013 (amended some sections of the Law in 2014).

It has registered its Employees with PFAs and started remitting 10% employer & 5% employee pension contributions; remitted employer pension contributions up to December 2017 and employee pension contributions up to August 2020 for the State employees.

The State remitted employer and employee pension contributions up to August 2018 for the Local Government employees.

It has opened a Retirement Benefits Bond Redemption Fund Account with a PFA, for the Local Government employees in line with the State Law but yet to conduct an Actuarial Valuation.

The State is facing the challenges of irregular funding of the Accrued Pension Rights for the Local Government employees and is yet to establish a Pension Bureau (implementation being driven by Office of the Head of Service & the Joint Account Allocation Committee).

The State is yet to open a Retirement Benefits Bond Redemption Fund Account for the State employees; yet to commence funding of the Accrued Pension Rights for the State Employees and yet to institute a Group Life Insurance Policy.

Ebonyi

Ebonyi State has in 2017, enacted a Law on the CPS (amended the Law and forwarded a copy to PenCom and the Commission has communicated its observations on the Law to the State).

The State is yet to establish a Pension Bureau; yet to register its Employees with PFAs, yet to commence remittance of Pension Contributions; yet to conduct an Actuarial Valuation; yet to open a Retirement Benefits Bond Redemption Fund Account; yet to commence funding of the Accrued Pension Rights and yet to institute a Group Life Insurance Policy.

Enugu

The State has enacted a Law on the CPS in 2014 but yet to establish a Pension Bureau; yet to register the Employees with PFAs; yet to commence remittance of Pension Contributions and yet to conduct an Actuarial Valuation.

The State is also yet to open a Retirement Benefits Bond Redemption Fund Account; yet to commence funding of the Accrued Pension Rights and yet to institute a Group Life Insurance Policy.

Imo

This State has enacted a Law on the CPS in 2008; yet to establish a Pension Bureau; yet to register the employees with PFAs; yet to commence remittance of Pension Contributions; yet to conduct an Actuarial Valuation; yet to open a Retirement Benefits Bond Redemption Fund Account; yet to commence funding of the Accrued Pension Rights and yet to institute a Group Life Insurance Policy.

To this end, analysts and industry’s Stakeholders have condemned the lack of commitment by some state and local government towards the adoption of CPS in their various domains.

In a bid to ensure full adoption of CPS in the country, the National Assembly has concluded plans to set up a task force which would help engage state governments and come up with innovative ways that would help them embrace Contributory Pension Scheme (CPS).

This was part of the resolutions reached at the just concluded 3rd annual Pension Fund Operators Association of Nigeria (PenOp) and National Assembly, tagged: PenOp-NASS retreat, which held at the weekend in Lagos.

Stakeholders who attended the event included, members of Pension Fund Operators Association of Nigeria and National Assembly – Joint Committee for Establishment and Public Service of the Senate and House of Representatives Committee on Pension, also resolved that huge public enlightenment is required to drive compliance among state governments to expose them to benefits of embracing the contributory Pension Scheme and also educate them on how to leverage pension assets to facilitate infrastructural developments.

Meanwhile, to ensure a sustainable pension growth in Nigeria, the National Pension Commission (PenCom) has unveiled five strategic focus areas.

The five strategic focus areas are public enlightenment and education; resolution of outstanding pension liabilities of the Federal Government; portfolio diversification of pension fund investments; improvement in customer service delivery across the pension industry and unrelenting pursuit of sustainable growth of the pension industry by expanding coverage of the CPS.

The Director-General, Mrs. Aisha Dahir-Umar, made the revelation while briefing journalists on the activities and plans of the Commission at this year’s Journalists Workshop organized by PenCom in Lagos.

She said the five strategic focus areas are the areas of emphasis that would be pursued vigorously towards the attainment of the Commission’s objectives.

According to Mrs Dahir-Umar who was represented at the occasion by the Head, Corporate Communication Department, Mr. Peter Aghahowa, “public enlightenment and education is one of the five strategic focus Areas currently pursued by the Commission.

“This is considered germane considering that seventeen years after the pension reform in Nigeria, there still exists a knowledge gap on the CPS. Consequently, the Commission is committed to reinvigorating its public enlightenment and education drive in order to address this challenge.

“Other Strategic Focus Areas include the resolution of outstanding pension liabilities of the Federal Government; portfolio diversification of pension fund investments, improvement in customer service delivery across the pension industry and unrelenting pursuit of sustainable growth of the pension industry by expanding coverage of the CPS.

On the Contributory Pension Scheme (CPS), she said the number of registered contributors under the CPS has grown to 9.38 million while pension fund assets rose to N12.66 trillion as at 30 June 2021.

The DG said the growth in the pension fund assets under the new pension scheme, is an indication of prudent and sincere management of the pension fund by the pension operators and the regulator.

“The maintenance of a consistent growth trajectory continues to justify the Commission’s overriding investment philosophy of ensuring the safety of pension fund assets,” she stated.

She reassured the industry’s stakeholders that the implementation of the CPS remains on course.

She said the payment of the Federal Government approved 2.5 per cent differential in the rate of employer pension contribution for FGN retirees and employees, which resulted from the increase in the minimum pension contribution for employers from 7.5 per cent to 10 per cent, in line with Section 4(1) of the Pension Reform Act (PRA) 2014 has commenced.

The PenCom boss said “the payments would undoubtedly boost the RSA balances of the beneficiaries towards better retirement benefits. The settlement of these outstanding accrued pension rights of verified and enrolled FGN retirees would result in reversing a major challenge that has lingered since 2014.”

She said the commencement of payment of the reviewed monthly pension contribution rate by the Federal Government is another significant step in ensuring compliance with the PRA 2014.

On technology, Mrs. Dahir-Umar said the most recent technological innovation introduced by the Commission is the in-house designed and developed online Enrolment Application, which has capabilities to register, verify and enrol prospective retirees of Treasury-Funded Federal Ministries, Departments and Agencies (MDAs).

She said by the deployment of this new application, mass gathering of people has been avoided while enhancing convenience for the prospective retirees through a seamless enrolment process.

The pilot run of the newly developed online enrolment application, according to her, will commence from August 2 to 20, 2021.

Another notable technological innovation by the Commission, she mentioned was the design and deployment of the Retirement Savings Account (RSA) Transfer System (RTS), which was launched in November 2020.

The RTS is a Computer Application developed by the Commission, through which RSA holders transfer their RSAs from one Pension Fund Administrator (PFA) to another. Indeed, the activation of the RSA transfer provision, which deepens individual choices, is a major milestone in the implementation of the CPS.”