The Pension Reform Act 2014, which stipulates at least a 10-year jail term on conviction for pension fund administrators or anybody who misappropriates or diverts pension funds, is meant to address the serial stealing of pension funds. In addition, the provision of a fine of an amount thrice the misappropriated or diverted sum should take care of the embarrassing incidents of pension frauds and the weak penalties.
In January 2013, Yakubu John Yusuf, a former director of the Police Pension Fund pleaded guilty to a N39 billion fraud and was convicted for personally stealing N1.3 billion. He paid N750, 000 fine on the spot and gained his freedom to much public outrage. The National Judicial Council on 26 April 2013 suspended Justice Abubakar Talba from office for a year without pay over findings that he did not exercise discretion in sentencing Mr. Yusuf.
The Economic and Financial Crimes Commission, EFCC, is currently prosecuting eight others on an 18-count charge of stealing N46 billion from the Police Pension Fund.
Obviously, the old law never envisaged the greed with which those with access to the fund would descend on it for their own good. Under the new law, Mr. Yusuf would have paid N3.9 billion, the equivalent of three time what he stole, as fine.
The new law covers public and private sector workers. Private sector employers with at least three staff are expected to participate. The Act also stipulates that any pension fund administrator or pension fund custodian or anybody convicted for diversion or misappropriation of pension funds would be compelled to refund the said amount and forfeit property, asset or fund with accrued interest to the Federal Government.
A Pension Fund Administrator, PFA, which does not meet its obligations to pension contributors would pay a fine of N10 million and its directors would pay N5 million each.
If a PFA does not comply with any provision of the Act, the law proposes a penalty of not less than N500, 000 for each day non-compliance continues.
Sundry provisions in the bill target reforms that would strengthen regulation of pension funds administration, which if implemented could end the scandals that are associated with pensions.
However, quick assent of the President to the bill is critical to saving what has not been stolen from pension funds. Amounts mentioned in the police case alone show the depth of malfeasance in management of the funds.
A delay in assenting to the bill could be the final opportunity pension funds thieves need to empty the coffers knowing they would be tried under the old law that punished N1.3 billion theft with N750, 000 fine. Our laws do not take retroactive effect.