By Cosmas Omegoh (Lagos), Priscilla Ediare (Ado-Ekiti), Seye Ojo (Ibadan), Tony Osauzo, Ighmuaye Lucky, Osauzo (Benin), Emmanuel Adeyemi (Lokoja), and Layi Olanrewaju (Ilorin)
Pension matters in Nigeria have remained hugely unresolved. A cross section of the people the reformed scheme is meant to serve insists issues bordering on its administration still pose a nightmare.
Human rights activist, Jide Ajeigbe recalled that “the Pension Reform Act (PRA) (2004) was enacted to address the manifest weaknesses of the old pension schemes.”
It is aimed at sparing workers the pain of getting their pension and gratuity after they have left office. The law empowers the National Pension Commission to manage pension administration in the country. Later in 2014, the Act was amended, allowing the Contributory Pension Scheme (CPS) to come on stream. Everything was targeted at sparing the suffering Nigerian workers the agony of not assessing promptly their retirement benefits after they have retired from service.
But 17 years after the Pension Act was enacted, and seven years after its amendment, nothing significant seems to have changed. They nearly remained the same.
Our correspondents learnt that “this new pension scheme is contributory, fully funded, privately managed, third party custody of the funds and assets are based on individual accounts. It ensures that everyone who has worked receives his/her retirement benefits as and when due.
“The new pension scheme covers all employees in the public service of the Federation, the Federal Capital Territory and the private sector of the economy.”
The pension law provides that “an employee shall make monthly contributions of a minimum of 7.5 per cent of the total of his/her monthly emoluments into his Retirement Savings Account (RSA),” while “the employer shall contribute a minimum of 7.5 per cent of the employee’s monthly emoluments towards the retirement benefits of the employee.”
Over the past years, workers’ savings domiciled with various pension management companies have grown in leaps and bounds. They run into several trillions of naira.
But regrettably, according to Ajeigbe, “we have introduced the Nigerian factor into it. They include failure to fulfil simple agreement and attempt to cut corners in every situation.”
He noted that those shortcomings had resulted in failure or inability of retirees to access their funds promptly.
He castigated the government for reaping where they did not sow. “For instance, they are not paying their own contribution to the scheme and is the same scheme they resort to and borrow funds from.”
He pointed to a need for continuous regulation and strengthening of the institutional structure of the new scheme.
It would be recalled that there have been ugly stories of mismanagement of some money said to be part of workers’ contributions, with Abdulrashid Maina, a former boss of the PenCom’s saga, popping out each time.
Even at some point, it emerged that the Federal Government was angling to borrow money from the workers’ contribution, which it believed was lying idle.
Ever since, there have been other tales about the pension scheme making the rounds – particularly those of the unverified difficulties encountered by retirees in assessing their contributions.
Indeed, it was gathered that some state governments have shown no interest in the contributory scheme so much that years down the road, they had not shown any form of commitment to giving the scheme a legal backing.
Even in the states that had shown interest, the workers have been accusing them of insincerity, and failure to pay their own part of the monthly contributions, and even remitting whatever the workers have contributed.
The public sector alone is not the sole culprit. There are allegations that some private sector operators too are guilty of the unfaithfulness to the scheme.
Expectedly, workers’ frustrations, growing discontent and complaints have given impetus to strident calls for sweeping reforms of the scheme.
Consequently, a cross section of the workers are agitating that the scheme be fully reformed to reflect the new time. For instance, the workers are rejecting piecemeal payment of their contributions, with some contending that their benefits now be paid to them in lump sum.
Private sector retiree complaints
One of the retirees bitter with the mode of payment guaranteed by the CPS, is Mrs Mercy Iwuafor.
She was laid off by an oil services firm back in 2017 following the downturn in the economy.
She claimed that she was paid 25 per cent of her N3 million savings by her pension managers. And thereafter, the administrators have been paying her a paltry N10,000 monthly.
“That is unacceptable,” she fumed, adding that “Every month, I go cap in hand to receive slightly-above N10,000, spread over 20 years. That is grossly unfair.”
Reminded that the money is for her retirement, she fired back: “That law is evil. I ought to have a say in how I should get back my money.
“There ought to be a clause that leaves the retirees the choice of either getting their money in bulk or piecemeal.
“If I have my money, I would use it for a business rather than waiting for month end to get N10,000 which has already been crushed by inflation.”
Ekiti State workers say Nigerian factor killing scheme
A civil servant in Ekiti State, Mr Oni Ajayi, described the CPS as “a nail out for the government and the retirees.
“It is a way to bring a hopeful future to our senior citizens. It will arrest the backlog of debt perpetually being carried over by government which is denial of the basic entitlement of retirees.”
Oni, however, proffered the way forward:
“The law should actually be empowered to work.
“The government’s willingness and commitment to the law should be total.
“The idea of government systemic borrowing from the fund should be outlawed, if not, there should be an equivalent security for the recall when needed.
“The payment schedule should be first 50 per cent, next 20 per cent, next 20 per cent and finally 10 per cent from zero to five years interest on investment inclusive.
“The government and the body of the retirees should put together transparent law, devoid of fraudulent intention and allow it to work. Ineffective laws are the bane of our development.”
Another civil servant in the state, Prof Oladipo Ogunleye said: “As with many laudable programmes in Nigeria, the scheme has been bedeviled by the so-called Nigerian factor. With the way things are presently, I’m not optimistic about its success.
“When will the Federal Government pay back the loan from the funds? How are we sure someone will not come to halt the payment in those states where pensions are being paid currently?
“It should be made optional for states and civil servants. I can’t see most states governments making their own contributions. Many of them are not even paying salaries.
“In any case, if it’s going to be implemented, 100 per cent lump sum should be paid at retirement.”
Oyo State NLC, civil servants reject CPS
Meanwhile, the leadership of the Nigeria Labour Congress (NLC) and civil servants in Oyo State have rejected the current Contributory Pension Scheme in the state, saying they were pushed to take the action by insincerity of the Federal Government as well as the governments of the states that have begun the implementation of the scheme.
The state NLC chairman, Mr Kayode Martins, admitted that the state has the law in place, but the labour force kicked against its implementation during the past administration in the state based on its inherent deficiencies.
Civil servants in the state, who toed the line of the NLC boss on the CPS brouhaha, said that they did not want the state government to implement the scheme because it had been discovered to be fraught with irregularities.
Martins said, “once beaten, twice shy. The experience of the neighbouring states has not been encouraging at all. Most of the states that had earlier joined the scheme are pulling out.
“So, it is not wise for any state to dabble into it. For instance, we had a bad experience in Ogun State during the administration of Otunba Gbenga Daniel. The civil servants who retired then, up till now, have not been able to access either their gratuities or pensions, because the government failed to match their own quota with the contributions by the workers.
“Ordinarily, given the way the scheme is laid out, it should be embraced by everybody. But the governments at the federal and state levels have not been sincere about it; and that is the bottom line.
“The scheme says if you retire, you can only access 25 per cent of your contributions. Later on, we made a move for 40 per cent. It is our money and nobody should dictate to us how we should receive our life entitlements. It is not done.”
Martins recalled that he was privileged to be part of the labour leaders who met with the government on the implementation of the scheme in the state during the past administration, adding: “We kicked against it based on the facts before us.
“The state governors have not been sincere with the scheme. They will not remit their own quota. So, when the worker retires, he or she will now be running helter skelter.
“If the law is changed, and we see sincerity on the part of the federal and state governments, we’ll surely embrace the scheme. Anyone on the scheme should be allowed to decide whether he wants his contribution to be given to him 100 per cent or in tranches.”
Edo State civil servants want 100% payment
For the Edo State civil servants, they differ in their views on the scheme.
Those who spoke on condition of anonymity based on the Civil Service rule said that the government should not be the one to decide how much pension should be paid to them after retirement.
They said that their pension should be paid to them in bulk to enable them decide what to do with it.
“I don’t support the idea that the government should give me 25 per cent of my savings. The government should give me all the money so that I can decide on the business I would venture into,” one of the workers said.
Another civil servant in the state said that he was not comfortable with the scheme, adding that if he had his way, he would opt out.
But some civil servants described the programme as a welcome development. However, they said that paying them 25 per cent of their contribution shows that they are still part and parcel of the civil service.
Kogi State workers reject migration to new scheme
In Kogi State, the workers expressed dissatisfaction over plans to move their retirees to the CPS, as they are apprehensive it would be a rip off.
A cross section of the workers who spoke with our correspondent said that they like the current pension scheme where retirees enjoy at least 75 per cent of their total emoluments after retirement.
The workers further expressed fear that the state government might not remit the amount deducted from their salaries to the pool, suspecting that even if it did, the people in charge of the payment might shortchange them, citing the recent experience at PenCom.
They said that although the state government was not paying gratuity allowances inherited by the government of Yahaya Bello administration to pensioners, the payment of monthly pension which was slightly lower than the actual salaries was a relief to the pensioners.
For example, it was gathered that there was a backlog of unpaid gratuities from the previous administrations and that only about ₦100, 000 was being selectively paid to few retirees who were ready to bribe those in charge of the payment.
However, it was learnt that the Bello administration is now paying between ₦2 million and ₦6 million, but only a certain people from a part of the state benefit.
A civil servant, Joseph, who said he would be retiring next year, told our correspondent that those who had less than five years to retire had been given the option to join the new scheme, but those who still had more than five years would be forced to join the scheme.
He lamented that some workers in the state were only promoted without cash backing more than five years ago, recalling that most of the workers were paid miserable amounts due to cooperative and loan deductions.
He wondered what would be left for them if certain percentage of the salary is being deducted again.
Kwara State workers insist CPS unjust to civil retirees
Some of Kwara State civil servants who spoke to our correspondent on condition of anonymity admitted that the state government is among those whose CPS bill is at its formative stage to enable them migrate to the new scheme. They, however, said if fillers from the public servants in the federal and other states service which have keyed into the scheme were anything to go by, that would be rather an attempt to suffer the retirees.
A director in one of the ministries said: “When we were employed in the service, there was a Defined Benefit Scheme, which was to ensure that upon retirement, we would be paid our pension and gratuity. Under that old arrangement, if a civil servant spent five years in service and wanted to withdraw, he was entitled to gratuity. Then, those who had spent up to 10 years were entitled to both pension and gratuity.
“But a new law was introduced in 2014, which changed everything. Unfortunately, most of us had served up to 20 years and above. For instance, I have served up to 21 years. If I had resigned before the new law, they would have paid me my full entitlement as a retiree.
“But the Contributory Pension Scheme, provides that at the end of service year, instead of getting our full entitlements, we would only be paid one quarter of the sum.
“With the new scheme, the money will be divided into four; one will be given only one quarter, while the authorities keep the other three quarters. That they claim they are managing for us as if we are not mature enough to manage our money.
“With this new arrangement, you can’t actually do anything meaningful with the peanut they pay you. With this, some retirees cannot even reallocate from where they served to their homes; many cannot take care of their children and families; some are in hazardous situations, on account of sickness and other injuries they sustained in the line of duty; and these situations are managed with drugs that are costly which they cannot afford. Most of such retired men have died. Is this what we deserve after our 35 years of service?”
Govt using CPS to enslave workers, says federal civil servants
A worker in the federal civil service accused the government of only trying to enslave workers the more with the new pension scheme.
He said, for instance, they had succeeded in creating a division among Nigerian workers.
“If I were to resign under the Defined Benefit Scheme, which I met on the ground, by the time the new minimum wage was approved for others, I would have benefited too.
“Recently, they did a consequential adjustment to the salaries of those on the Defined Benefit Scheme, but for those of us under the Contributory Pension Scheme, there was no increment.
“They have divided us into two groups; while some are being funded by the same government, others are abandoned. I will be sincere with you, it is high time government changed this law.
“Now, look at another example. I am due for retirement early next year, if I’m going, I may or may not get my savings because of another law which stipulates that I should be paid 25 per cent of my total savings. That is if government pays its own contribution to the scheme. And out of their non-compliance now, they want to borrow the rest of my total savings which they might not pay back. How do I survive in that situation?” he asked.
He urged the legislators to be patriotic and look at the laws holistically, insisting that all the states and the private sectors be captured in the scheme.
“Let there be an increase in the figure retirees should take out of their savings from the present 25 per cent to 75 per cent while the balance is either invested in a profit-yielding business of the savers’ choice,” he advised.