The revised Pension Act recently assented to by President Goodluck Jonathan after its passage by the National Assembly certainly ranks among the best things to come out of this extant democratic process. It is a remarkable improvement on the 2004 law and deserves to be applauded as a major achievement. The plight of most Nigerians in retirement has always been pathetic as the need and schemes to make provisions for their wellbeing especially after years of meritorious service have always been problematic. Pensions for public service employees have been notoriously riddled with corruption and consequent trauma or even death for beneficiaries as they toil on long queues to claim their dues.
Against this backdrop, the 2004 Pension Act, when it was enacted was seen as a wholesome blessing. The objectives were laudable. It was designed to (a) “ensure that every person who worked in either the Public Service of the Federation, Federal Capital Territory or Private Sector receives his retirement benefits as and when due; (b) assist improvident individuals by ensuring that they save in order to cater for their livelihood during old age; and (c) establish a uniform set of rules, regulations and standards for the administration and payments of retirement benefits for the Public Service of the Federation, Federal Capital Territory and the Private Sector”.
The law, however, was turned on its head and the loopholes in it were exploited by unscrupulous officials to the extent that some of the nation’s most gigantic corruption took place in the pension process and infrastructure. The country was regaled with scandalous misappropriation of pension funds to the horror of employees. These shortcomings may have informed the revision of the Act now re-engrossed as the 2014 Pension Reform Act by the National Assembly and assented to by the President recently.
The new pension law prescribes among others, upward review of penalties and sanctions to pension defaulters and employers who fail to remit deducted monies of their employees. The Pension Reform Act 2014 also has provisions that will enable the creation of additional permissible investment instruments to accommodate initiatives for national development, such as investment in real sector, including infrastructure and real estate development. This is provided without compromising the paramount principle of pension fund asset. The new Act takes cognizance of the fact that there are currently more sophisticated mode of diversion of pension assets, such as diversion and/or non-disclosure of interests and commission accruable to pension fund asset, which were not addressed by the PRA 2004. Consequently, it then creates new offences and has provided for penalties that would serve as deterrent against mismanagement or diversion of pensions funds assets under any pretext. Of interest is the provision that “persons who mismanage pension funds will be liable on conviction to not less than 10 years imprisonment or fine of an amount equal to three times the amount of misappropriated or diverted or both imprisonment and fine”.
The 2014 Act also empowers the Pension Commission (PenCom), subject to the order of the Attorney General of the Federation, to institute criminal proceedings against employers who persistently fail to deduct and/or remit pension contributions of their employees within the stipulated time; an immense omission in the 2004 Act which allowed only PenCom to revoke the licence of erring pension operators but did not provide for other interim remedial measures that could be taken by PenCom to resolve identified challenges in licensed operators.
The new pension Act is certainly a good piece of legislation on paper and Nigerian lawmakers must be applauded for discharging this all-important responsibility. Although it has been signed into law by the President but this is by no means a fait accompli, meaning that all hands must still be on deck with regard to its implementation. Shoddiness and inaction could set in and the lukewarm attitude which is characteristic of government bureaucracy may prove the undoing of the law. It must be noted that the law is only as good as its enforcement.
Now that the fine lines of the provisions have been adopted, the law must rule.
Integrity of the process is very important and there should be measures for its implementation. The PenCom which has the mandate of directing and overseeing the overall policy on pension matters must as a matter of necessity promote capacity building and institutional strengthening of pension fund administrators as well as custodians. PenCom must not take its responsibility lightly and must remain focused to make itself an efficient institution with the in-built advantages of strength, and inspiration of confidence. Once this is guaranteed, all organisations and employees alike would be encouraged to embrace the new pension process.
