By Cosmas Omegoh (Lagos), Gyang Bere (Jos), Lateef Dada (Osogbo), George Onyejiuwa (Owerri), Okey Sampson, (Umuahia), Rose Ejembi (Makurdi) Geoffrey Anyanwu (Enugu), Tony Osauzo and Ighomuaye Lucky (Benin), Tony John (Port Harcourt), and Oluseye Ojo (Ibadan)

 

Problems presented by pension matters across the country remain huge despite previous push to solve them. The current challenges are part of the country’s mosaic of problems – and sadly might remain so for a long time.

Over the years, tales told by retirees struggling to get their money have neither been musical, nor sweet to the ears. 

From one part of the country to another, workers who retired from both the public and private sectors have been waxing the same old dirge, their voices ring out from the fields of despair, dense with pain and pity. Yet no one seems to listen.

Now, everyone knows that many workers die pressing for their entitlements, with the authorities looking the other way ignoring their misery.   

Pension Reform Act 2004

Long before 2004, pensioners had been seeing hell in the hands of pension handlers. Many of the retirees were denied their entitlements long years after they quit office.   

That was part of the reasons, the Pension Reform Act, 2004 was enacted. The act which was intended to ease the retirees’ plights, “establishes a Contributory Pension Scheme for payment of retirement benefits of employees of the Public Service of the federation, the Federal Capital Territory and the private sector.

“The Act repeals the Pension Act of 1979 (CAP 345 Laws of the Federation of Nigeria) and consequentially amended the Nigeria Social Insurance Trust Fund Act of 1993 which hitherto regulated retirement benefits in the public and private sector respectively.

“The act became necessary to ensure that uniform regulations and standards apply to the administration of retirement benefits for the private sector and the public sector as well as to ensure that individuals save towards catering for their old age.”

It was learnt that the essential provision was the focus on the private sector.

Before the act, “pension plans were optional in the private sector and not operative in many organisations. Where one existed, the retirement benefits were loosely administered, with employers managing the funds. In both the private and public sector, huge deficits in the pension funds were reported, with retired workers facing non-payment of their pensions, or queuing for days to claim what they are owed.”

Pension Reform Act 2014

Despite the expected reforms the 2004 pension act was expected to usher in, huge gaps in pension administration still existed. This led to the need for Pension Reform Act 2014. The “act repeals the Pension Reform Act No 2 of 2004, and enables the Pension Reform Act 2014 to continue to govern and regulate the administration of the uniform contributory pension scheme for both the public and private sectors in Nigeria.”

It was learn that this act provides for the establishment of a Contributory Pension scheme and a National Pension Commission (Pencom), a body corporate to administer the provisions of the act.

Among other provisions of the act, the employer shall contribute a minimum of 10 per cent of the employee’s monthly salary, while the employee contributes a minimum of eight per cent of his monthly salary.

The employer is not entitled to make any withdrawal from his saving until they attain 50 years unless he/she has mental or severe health challenges. But they can make withdrawal if disengaged from work and within four months, they are unable to secure another job.

But where one retires at 50 or below, he/she is entitled to draw 25 per cent from his/her saving. Thereafter, the PFA is at liberty to pay the retiree monthly stipends until their savings are exhausted.

Present scheme unjust, retirees complain 

Across the country, some Nigerians have been heard lamenting the situation where PFAs are the sole determiners of how much to pay after the initial 25 per cent lump sum is not the best to happen.  

Two years ago for instance, Mrs Ikeji was relieved of her job with an oil services company in Lagos shortly after she turned 50.

 “I got nearly N1 million out of the N4 million I had with my PFA. 

“Now, all what I get from them monthly is a little above N10,000. And that will be the case until the remaining N3 million is exhausted. That is absolutely unfair, and unjust. What do I do with that sum? That pension law is horrible!

“Now, look at what inflation is doing to my savings. Why can’t I determine what to do with the money? Has the PFA not held it long enough?” she queried. 

Recently, a man, Mr Maroof Abdul Giwa who voluntarily retired at 60, took his PFA to the National Industrial Court of Nigeria (NICN) Abuja Judicial Division, after the organisation paid him 25 per cent lump sum which he rejected, claiming he was entitled to 50 or 75 per cent of his savings.

NICN had ruled that “Section 7(2) of the Act, which stipulates a 25 per cent lump sum payment, applies only to a person who voluntarily retires, disengages, or is disengaged from employment by age 50 or below.”

The Senator Wamakko pension reform bill 

In line with the controversy that trailed the NICN ruling, Senator Aliyu Wamakko (APC-Sokoto) on February 9, 2022, moved a motion in the Senate seeking an amendment to the 2014 pension act.

Entitled “The Pension Reform Act 2014 Amendment Bill 2022,” the billed has so far scaled the second reading.

He is seeking an amendment to the Pension Reform Act 2014, to make way for a greater percentage paid to the retirees other than the controversial 25 per cent.

It “provides for a definite and reasonable percentage a pensioner can withdraw from such account,” he said.

He told his colleagues that “none of us can claim ignorance of the long-drawn-out anguish of retirees from the Civil Service, Nigerian Prison Service, universities and other federal agencies in the country.

“These retirees rather than enjoy retirement after selflessly serving their fatherland, have continued to live in misery and pain, leading to diseases and even death, as they cannot easily access their benefits.”

He recalled that “there is the existence of a Pension Reform Act 2004, which is now amended as Pension Reform Act 2014.

“It provides for a departure from the old pension scheme of ‘Defined Benefits’, to the new Contributory Pension Scheme (CPS). It also provides for the set-up of the National Pension Commission (Pen Com).”

He went on to say that “but the true situation is that only the pension administrators are benefiting, while the owners continue to suffer total neglect.”

Other senators in their contributions had welcomed the motion as laudable.

Senate Deputy Chief Whip Sabi Abdullahi described the proposed amendment as timely, lamenting that “those who are already having the defined contributory pension, have been relegated from understanding what happened to their money.

“This is the misery that pensioners are suffering from. By 2024 that would have been 20 years of the implementation of this pension reform.

“It is time for us to begin to assess and evaluate the operation over these years and to see the ills or successes to come up with another comprehensive report that is people-friendly that will help the retirees,” he said.

Similarly, Sen. Istifanus Gyang (PDP-Plateau) noted that the challenges of the retirees were big. 

“However, the contradiction and irony are the unfortunate reality that retirees and pensioners face while their accumulated savings are feasted upon by corrupt officials requires that this bill should be given speedy consideration.”

He regretted that “the administrators of pension funds are the ones that draw profits from those funds, while the pensioners, the contributors are left without any consideration.” 

Earlier, Senate Leader, Yahaya Abdullahi had urged “a fundamental reform in that kind of thing so that the retirees have a say in the amount of money that they receive as lump sum out of their savings account.

 “This monthly allowance should be reviewed so that the sufferings of retirees at the federal level can be addressed.”

He added that the pension problems in the states are even bigger than imagined. And he was right.     

“The area the sponsor did not touch is the area of the states. That is where the bulk of the pensioners live and their life has been devastated. Some of them are dead; some of them are completely neglected.

“I recognise that the act operates only at the national level for Federal Government staff.

“Is there no way we can induce in this legislation, some means of forcing the states to pay pension arrears and to also make sure that retiring staff who died in the service of the state are allowed pension allowances that will amount to a living wage?” he queried.

Pension problems in states

The Senator Yahaya Abdullahi concerns aptly brings to the fore, the enormity of suffering various state governments workers are facing while their governors look away. Many of the states do not have any form of pension scheme, while in some, deductions are made from their salaries are not remitted.    

Osun contributory pension: Remittance irregular 

 The Osun State government appointed a PFA, but the remittance of the deduction from workers salaries has been irregular.

 It was learnt that the state has about 27 PFAs spread across the 31 local governments and the Ife area office.

A civil servant in the state who pleaded anonymity said the deductions have been regular, but not the same with remittance.

“We were receiving half (remittance) till July 2019 before they started paying fully in January 2020. They skipped payment even for six months at times. 

“We cannot even calculate it because it is not regular. When they skip some months, they will pay for some. From January 2021, they remitted fully. Between July 2019 and December 2020, they remitted only our own.”

Another civil servant said: “They paid till July 2021 before they stopped. Later, they paid from August to November. I received an alert the last time on November 26, 2021.”

Plateau yet to key into Pencom 

Meanwhile, Plateau State government has not keyed into the Pencom scheme; the state Assembly has not finally pass the amended bill into law.

The bill was said to have been passed into law some months ago in preparation for a smooth take off of the scheme, but was sent back to the House for amendment of some sections when chairman of Pencom visited the state.

The Head of Civil Service, Engr. Sunday Hyat told our reporter that the state government was still waiting for the passage of the amended bill by the state Assembly to commence the pension scheme.

He explained that a consultant was engaged and fund released for the programme before his appointment as Head of Civil Service.

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He noted that deduction of the retirement savings from salaries of workers would only commence when the scheme had taken-off fully and a PFA appointed.

“When I came in as Head of Civil Service, I met the state in the process of keying into the National Pension Commission. The process was being facilitated by the former head of service.

“A consultant was engaged, and a bill sent to the Plateau State House of Assembly which passed through public hearing.

“The House passed the bill into law, but a meeting was convened in Jos; the Chairman of National Pension Commission came and made observations, and pointed at some sections that needed to be amended before the governor could sign it into law.

“As we speak, the House has not passed the amended bill to enable us take off. What I know is that fund has been released to the consultant for office accommodation, and we will take off as soon as the bill is passed into law.”

Hyat explained that the consultant was supposed to provide the government with some soft and hard wares to ensure accountability of every deducted fund.

“We have not started deducting retirement savings from salaries of workers. It is when the scheme takes off fully that government will appoint a PFA who will ensure that   money deducted is remitted for accountability,” he stated.

Imo does not have any PFA 

The Imo state government does not have any pension arrangement for the civil servants in the state. 

One of the civil servants who spoke to our correspondent on condition of anonymity disclosed that the present administration does not have any of such arrangement.

He pointed out that having one would have solved the current problems civil servants encounter while trying to assess their pension after retirement.

However, it was learnt that ex-Governor Emeka Ihedioha had planned to introduce the policy as a way of solving the pension problem but could not actualise that before his sudden removal from office by the Supreme Court on January 14, 2020.

Abia workers unsure if remittance is made   

Abia State government, it was revealed, has no PFA. Rather, what is in place is a pension board headed by a chairman.

A source said the pensions board exists only in name following claims by some civil servants in the state that they were not in a position to know if there were deductions being made from their salaries and paid to the pensions board since they do not get alert at the end of the month to prove that such deductions are actually being remitted by the government on their behalf.

A director in one of the ministries who didn’t want his name in print said the way the system operates, it will be difficult for any civil servant to categorically say if any money is deducted from his or her salary for pension, and how much is involved since they do not receive any alert from the pensions board.

“I cannot categorically say the amount being deducted from my salary as pension. The way the system operates here does not allow anyone to know if pension is being deducted or not.

“It is when you are given your pay slip at the end of the month or receive alert from the pensions board that you have a proof that deductions are actually being remitted by the government on your behalf.”

Another civil servant, Kanu, affirmed that he does not receive alert from the pensions board, indicating that pension deductions made from his salary is by the government on his behalf.  A female staff of one of the local governments in the state said there is no PFA appointed for local government workers.

“What we have in place in that regard is a private arrangement some local government workers made with a first-generation bank whereby a certain percentage of our salaries are deducted and paid to the bank.

The amount would be repaid to the concerned workers on retirement.”

Efforts to reach the chairman of the pension board were not successful. However, a staff who spoke on condition of anonymity said the board would soon attend to some grey areas in its operations.

Benue workers unsure deductions are remitted   

In Benue, it was learnt, PFAs have been appointed and money was being deducted from workers’ salaries for the contributory pension funds.

A lecturer with one of the state’s tertiary institutions told our correspondent that deductions were made for pension from his salary up until May 2021 but was later stopped.

He said he initially was not receiving alerts from his pension fund administrator,

Veritax Glanvills Pensions Administrator. But he started receiving that after he lodged a complaint to that effect.

He, however, noted that although it was supposed to be a contributory fund, while deductions were made from his salary, the government was not remitting its own part of the contribution to the PFA until the deductions from his own account were suspended in May last year.

Efforts to get the state Pencom chairman, Terna Ahua’s comment failed as calls to his cell phone were neither taken nor returned.

Enugu state yet to enroll

In Enugu State, the contributory pension scheme is yet to take off, it was learnt, as the state government has not constituted the management board among other things.

The state civil servants who spoke to Sunday Sun said they had not seen signs of any PFA, while their money was not being deducted.

One of the workers said: “I am not aware of the PFA, except they are deducting our money and we don’t know about it. But noting on our pay slip suggests such deduction is being made, and we have not been contacted by any PFA. So, I am sure that the scheme is not running here; maybe it will commence in the future.”

Although, attempts to get the authorities in the state Ministry of Finance to speak on the scheme failed, the Nigeria Labour Congress (NLC) leader in the state, Virginus Nwobodo, confirmed that the state had not started running any contributory pension scheme.  

He said: “The contributing pension scheme is not yet being implemented. But since 2015 and 2016, they chose PFAs for the workers. They have opened accounts for the workers; the PFAs gave them numbers, but they have not started.

“If we are going to start, the governor will set up a bureau that will be managing the funds. You know they (government) will make contributions, but there is no such board for now. We have not begun and cannot begin to do deductions or contributions when the government has not made any commitment. So, it is when they agree fully to abide by the law, that we will agree that money should be deducted from our members.

“Of course,  you know how it is operated; we contribute eight per cent, government will pay 10 per cent, but before that contribution, there will be a management board that will be constituted by the government. Then they open a central account for both contributions; that is how it is; we are still watching.”

 Nwobodo, however, said that attempts were being made by the state to join the scheme.

In Edo, it’s mixed fortunes

In Edo State, civil servants who have been enlisted in the state pension scheme have started counting their gains, but not without some challenges.

One of the workers who craved anonymity said the PFA is fully operational in the state, claiming he gets regular alerts for any deductions from his salary.

“The state has commenced its pensions programme. The PFA is living up to its expectation by alerting us monthly. But the government pays quarterly; that we can see from the alert we get from our various PFAs.

“But there are some staff who have spent quality years before the introduction of this scheme. They are yet to see their accrued right which is an accumulation of their pension entitlements before the commencement of this present scheme although we learned that Labour is engaging the government to ensure that every contributor knows his or her accrued right because it is the prerogative for every contributor to know this well ahead of retirement so that they will be able to calculate all that they are entitled to before retirement,” he said.

Rivers workers want pension scheme abolished

In Rivers State, public servants have called for the repeal of the current pension scheme.

Some of the individuals, who spoke to Sunday Sun on condition of anonymity, said that the pension policy is not favourable to government workers.

Those, who work with ministries, departments and agencies (MDAs) alleged that, while government has consistently been deducting from their monthly salaries, it had not been remitting its own contribution since inception.

Also, the workers disclosed that they received monthly alert, though not   regularly, from their respective PFAs.

According to them, the unfavourable pension scheme is forcing some civil servants, who could no longer take it to “voluntary” retire.

Johnson (surname withheld) disclosed: “We get alert. But, the alert doesn’t come monthly. It’s a kind of belated. In the alert, it shows how much you have contributed. Sometimes, they (pension institutions) send statement of account, where information about savings are well spelt out. 

“The challenge the contributory pension has is that the government is not making their own contribution. From the day the agreement was signed, it has not been fulfilled. And the way we see it, there is no successive government that would come and clear that amount people said has amounted to trillions of naira.”

Meanwhile, while those working with MDAs claimed that the government has not kept to its part of the agreement since inception, those working with Rivers State-owned higher institutions said that the government remits the deducted percentage to the pension scheme, but not regularly.

According to this set of workers, sometimes, government remits after three months. They added that their respective pension institutions send statement of account to them, from where they get updates on the remittances made.

Oyo workers yet to embrace PFA – NLC

The Chairman, Nigeria Labour Congress (NLC), in Oyo State, Mr Kayode Martins, says workers in the state public service have not embraced the contributory pension scheme.

He categorically pointed at insincerity on the part of the government and the PFAs based on the bitter experience of workers in the public service in the neighbouring states.

“Except at the private sector’s level, those of us in the public service under the state government have not embraced the scheme because of what happened in our neighbouring states.

“The level of sincerity on the part of the government and the administrators is not encouraging at all.

“If some MDAs have been enlisted into the scheme, it is not to our knowledge in NLC, and it is on their own volition.

“I was there at the crucial meeting when the labour force in the state vehemently turned down the offer of PFA by the government. So, if anybody or any organisation, through the back door, brought in the scheme, out of their own volition, I would not know how that happened. 

“At the same time, if any worker in the state was forced to enroll into the scheme, he or she should come out and inform us; the NLC shall take it up.”

Most of the civil servants spoken to said they had not enrolled into the pension scheme. But a number of workers in a particular agency said they were deceived when they were enrolled.

One of them, who preferred anonymity, said: “Some forms were brought to our corporation on the grounds that those that filled the form would be given loans.  So, I filled it. Many other workers also filled the form. But we found out that deductions were being made every month from our salary. The administrator has not been sending alerts to us to know our status. 

“One day, I went to the accounts department and I told them that they should not deduct from my salary any longer.  But the details of how much they have been deducting from our salaries are only known to them. If you want to know anything about it, you have to go to the accounts department. That is wrong.”