Incredibly, the Federal Government is defaulting in the implementation of the new pension scheme, with its failure to remit a total of N67 billion retirees’ accrued pension rights to their Pension Fund Administrators. As a result, workers who retired from its service since August 2017 have not been paid their entitlements, thus causing them anguish.
The Director in charge of Supervision, National Pension Commission, Farouk Aminu, who confirmed this, attributed it to the delay in the passage of the budget and shortfall in cash made available to the PFAs to enable them to discharge their responsibilities. He said, “From 2014, the amount needed to pay accrued rights was slashed by two-thirds; so we were given just N2.5 billion from January 2014 and since then, we are yet to recover.” The crisis is bound to escalate with the recent enrolment of 9,125 ex-workers of the Nigerian Telecommunications Limited and its mobile arm, M-tel, in the monthly pension scheme of Pension Transitional Arrangement Directorate.
The Pension Reform Act 2004 made adequate provision for workers, who prior to the commencement of the new arrangement, were under any other pension scheme. For affected workers in the Federal Public Service so covered by any unfunded scheme, and who had at least three years to retirement, the amount due to them are to be acknowledged through the government retirement benefit bonds to be issued by the Debt Management Office and paid on retirement through their PFAs.
The International Labour Organisation says 48 per cent of persons over pensionable age globally have no pensions. Following the complete breakdown of the old pension system, which denied retirees the payment of their gratuities and pension many years out of service, the Olusegun Obasanjo administration launched the new scheme in 2004, which has paid off considerably. A total of N679 billion has been paid out in 14 years. What workers who are not covered by the CPS face on retirement, could be seen in the experience of the over 4,000 ex-Nigeria Airways employees currently undergoing verification and bio-metric data capturing for their clearance to be paid 50 per cent of their entitlements, 15 years after the airways folded up. Front page photographs in newspapers last Wednesday showed tons of files of the old pension order, which officials have to wade through, depicting the degree of work to be done before the anomalies could be corrected.
One of the retirees reportedly died while waiting in the queue for the verification. “The whole arrangement is chaotic… most of the people here are over 70 years old, so you can imagine subjecting them to this kind of situation,” one of them lamented. The government had recently provided N22.68 billion for the payment out of about N45 billion owed them.
Not paying workers’ retirement entitlements at the point of disengagement or retirement is unfair and sadistic. Therefore, civil servants who are yet to retire, both at federal and state levels, should take any form of breach in the implementation of the CPS seriously to avoid the life of anguish, privation, or the extreme case of untimely death, shortly after retirement. A PenCom info-graphics on the level of compliance with the CPS across the 36 states early this year, gave a clean bill of health to only 10 states and the Federal Capital Territory. They are Lagos, Osun, Ogun, Ondo, Kaduna, Anambra, Delta, Jigawa, Edo and Ekiti states. Two other states remitted only workers’ contributions.
As of May, only Abia, Adamawa, Ebonyi, Enugu, Taraba, Oyo, Sokoto, Kano, Kogi, Nasarawa, Imo, Bayelsa and Gombe states had enacted laws to guide the implementation. Others have not made any move at all. Ironically, no state lacks resources when providing outrageous severance packages and life pension for governors and their deputies. From 7.5 per cent minimum monthly contribution each, by the employer and employee, to make the total 15 per cent, the 2014 PRA increased the minimum contribution of an employee to eight per cent and that of the employer to 10 per cent, to bring the minimum total contributions to 18 per cent monthly.
Undoubtedly, the CPS is the only institutionalised social safety net in the country; therefore, it should be guarded jealously. In Europe, the United States and other parts of the world, pension matters and other social safety nets are considered critical social policies for senior citizens. Unfortunately, the organised labour has not demonstrated enlightened leadership on this. It ought to have compelled errant states through strike actions to embrace this post-service welfare package for its members. The Nigeria Labour Congress under the Ayuba Wabba leadership, therefore, should knock the non-responsive states into line. The congress exists not only for salary increase agitation, but also for a critical welfare concern such as this.
The compliance of a few states and oil revenue availability to all the 36 states, through the monthly Federal Accounts Allocation Committee distribution, are enough armour the NLC should exploit to good use. Regrettably, the National Assembly has not been alive to its responsibility, too. Ensuring that all public institutions complied with the contributory pension scheme is well within its oversight purview.
According to PenCom, the pension fund hit N8.14 trillion as of May this year. This is a huge capital that should not be trifled with. The Federal Government has been eager to use it to fund infrastructure and other needs. But the PFAs have so far invested about N6.89 billion in infrastructure bonds. However, observance of the provisions of the PRA on investible limits and areas to focus on should not be compromised. Efforts should be made to remit the funds without further delay, in order not to erode the gains of the Contributory Pension Scheme.
