President Goodluck Jonathan, last week, signed into law the 2014 Pension Reform Bill. This has automatically repealed the Pension Act 2004. What marks the new law out from the former one is the stiff penalties that await offenders, including looters and employers who fail to remit monies deducted from their employers.
Highlights of the new pension law include a 10-year jail term upon conviction for persons who mismanage pension fund or fine equal to three times the amount so stolen or diverted or both, imprisonment and fine. We support the provisions of the new law. Clearly, the sanctions in the repealed law had proved insufficient deterrents against fraud perpetrators. This is evidenced by the disingenuous methods some of the culprits used in looting the fund and getting away with a mere slap on the wrist.
Under the new pension law, the regulatory body, the Pension Commission (PenCom) is empowered to institute criminal proceedings against employers who have consistently failed to deduct and/or remit pension contributions of their employees within a stipulated time.
This course of action is, however, subject to the approval of the Attorney General of the Federation and Minister of Justice. Viewed against the repealed Act, this is an improvement, perhaps a decision informed by the exigencies of these times. Inthe old Act, PenCom could only revoke the licences of erring pension operators, with no remedial measures given to the regulatory body to resolve the lapses. This new measure is a clear statement of intent to tackle head-on pension fraudsters. It is a welcome relief to pensioners, many of whom had suffered untold hardship after retirement due to fraudulent practices in pension administration.
Altogether, we applaud the National Assembly for its commitment in passing the bill, and the president for his assent. But to be effective, the provisions of the law must be applied strictly and enforced. This is where the political will to punish offenders becomes expedient.
For now, at least on paper, the new pensions law could well be the much sought after legislation, if properly enforced. It may have set out a clear message that pension fund looters or intending perpetrators can no longer engage in such criminal conduct without dire consequences.
The private sector is not excluded from the penalties and sanction, if it defaults. However, we think that the N10 million fine against any pensions fund administrator that fails to meet the obligations of the contributors is too small, so also is the provision that recommends that each of the directors of the firm will pay a fine of N5million.
Nevertheless, it is good news that anyone who embezzles pension fund shall forfeit the loot, whether in property, asset or money with accrued interest on the stolen money.
All things considered, the new law may allay the growing anxiety and anger that often trail the looting of pensions funds. We enjoin state legislatures and governors to incorporate the new pension Act into their Pension Reforms Act, especially the provision relating to contributory pension and the upward review of the rate payable by the employers and employees as well as the corresponding penalties for defaulters. Pensions are the money people have worked for. Therefore, they deserve the reward of their labour on retirement.
