John Adams (Minna)
For over three decades, public sector workers who retired from service have borne the agony and pain of not getting their pensions and gratuities paid timely and regularly. Not a few people hearts have been rent by footage of old retirees, including those being assisted by relations, broadcast on television as they were put through endless verification exercises for payments that would often not materialize for many months after and yet, they would be made to undergo fresh verification exercise, year in year out. Many of such pensioners died without ever receiving their due pensions, neither were such pensions paid to their surviving relations. Rather, the accumulated funds were embezzled by top officials in the system as was seen in the case of one notable fellow at the federal level, who escaped to an African country on the northern borders of Nigeria.
The plight and frustrations of pensioners are better imagined than experienced. These retirees cut a pathetic picture of people who have labored in vain. But in Niger State the story is different as the present administration has restored hope to these special people. In this interview, the Director General of Niger State Pensions Board, Alhaji Tinau Mohammed talks about how the state has been able make its pensioners smile.
You have been at the helm of affairs of the Niger State Pension Board for four years. What has the experience been like?
Since the coming of this administration on May 29, 2015, the journey has been that of the good, the bad and the ugly. But first the ugly, because of the huge mess we inherited in terms of liability; the bad part was the sabotage by some people who never wanted things to work because they had been benefiting from the mess we inherited, but the good part is what we have been able to achieve as far as payment of pensions is concern in the state in the last four years.
First, March 18, 2016, there was a change of guard at the Pensions Board, when I took over. Under the provisions of the Pension Reform Act 2004 and the Niger State Pension Law (as amended in 2017), the board has full permanent members, comprising the Director-General and three other members. The board also has part time chairman and nine ex-officio members, comprising the 14-member board. We came in with a clear mandate, to reorganize, restructure and reform the operations of the board, and to bring about effective and efficient service delivery in pension administration in Niger State.
We were also to carry out the scrutiny of any liability under the old pension scheme or defined benefit scheme and the contributory pension scheme. We were to authenticate the genuineness of such liabilities and for government to provide funds for the payment of such liabilities.
So what did the board discover in the area of liabilities when you assumed office?
We saw what we called pension liability, not asset. You know there was what is known as the old pension scheme (DBS) and the contributory pension scheme (CPS). On the old pension scheme, there was a liability of N4.02 billion for state and local governments as well as N4.2 billion for the contributory pension scheme. In other words the accrued rights were not paid to over 4,415 retirees.
Now when you add the two, you discover that you have about N8.3billion; so now we had to scrutinize all the liability we saw and in the process, under the DBS we were able to reduce it by about N2 billion to N2.06 as the authentic liability under the DBS for both the state and local governments and about N1.4billion was saved in that area. And again on CPS like I said, we had N4.02billion as liability, now prior to the signing of the 2017 pension reform law in state government on September 2017, the board tried and paid out the accrued right for 543 retirees under the CPS, amounting to N1.4billion. On DBS, the governor approved the payment of N2.06billion. Now the Reform Act 2017 as amended and signed into law by the governor in September 2017 led to the shooting up of the liability.
Remember, I told you that we paid 543 retirees, so that means we had over 3,800 not attended to under CPS; so the bulk of them, close to 3,000 were now moved from that CPS to old pension scheme so when you look like the variable contained in the pension that is gratuity, death gratuity, pension arrears and the rest, all these ones now shot up the liability to the famous N22billion that we had.
So how were you able to address this, to achieve the stability in pension administration in the state today?
I should rather say that the question should be what government has done to attend to that huge liability, and in addition to moving people to the DBS and the issue of pension refund. During the 2015 election, the governor promised to do his best to tackle the problem of pension particularly the refund of 7.5 percent. The governor fulfilled the promise. We met with Pencom and negotiated with them, we had agreement and they gave us strategies to make refunds to retirees and employees. You know, we had a cutoff date of December 1992; that is, anybody whose date of his first appointment fell on or before December 31, 1992, was moved to the old pension scheme, so with this we still have about 1,002 under the CPS. Now the DBS also increased both ways, that is, the state and local government.
It now became the question of how the government should address this issue. The Pension Board devised a means; one, by re-computing all the retirees that were moved to the old pension scheme – about 3,000 of them. Some of those in this category had not collected money from the government and had not gotten what accrued to them and had not collected anything from their PFA; they constituted the first category. Those in the second category were the ones already on the payment of PFA. They had collected their lump sum through the PFA or through the insurance companies.
So how were you able to clear these two categories of retirees and the employees?
What we did was simple: at the State Executive Council meeting in 2017, the governor asked where we should start from and it was unanimously agreed that anyone who had not collected anything either from PFA or the government should be attended to because some of them had stayed for over 10 to 15 years without being paid, meaning the liability was incurred by the present administration but because government is continuous we had to take the responsibility. We now said anybody who is alive without benefit should be paid 30 percent so that we will be able to attend to so many of these retirees. The dead gratuity is 100 percent payment and we have been paying that without any problem since inception of this administration.
What happened to the refund of the 7.5 percent contributory pension?
On the refund of the 7.5 percent, again there are two categories: the first one are those people that have been enjoying the lump sum and monthly pension, and Pencom said such people should enjoy 30 percent of what is in their retirement savings account (RSA), so anybody who has not even collected anything from the PFA should be paid 50-50 because the contribution is employer/employee.
So, what is the total commitment of this administration in terms of payment of pension and gratuity since you came on board?
Well, I will sum it in three categories; first is the retirees benefit which include gratuity, arreas and the rest, and from June 2015 to December 31, 2019, the state government has spent N8.2billion on retirees benefit, and then the refund which is on two legs, the retirees and the employer because a lot of civil servants that are still serving fall under the old pension scheme; so for that category, the Pencom said they are to collect 50-50, that is 50 percent retiree/employee and 50 percent to the government. Under this category, the government made refunds amounting to N4.8billion to over 8,000 retirees and employees as at December 2019.
So the huge investment being made by the present administration is in the area of monthly pension. The pension law says one year after retirement you should begin to enjoy your pension and this administration has kept faith to this in the last five years. So from January 2016, the monthly pension for state civil servants alone after the verification exercise stands at between N121million and 125million to about 5,800 retirees.
Also for the local government civil servants, the government paid about N64million monthly up till when the pension law was amended. Right now because of the huge number of retirees that moved to the old pension, the payment went up. For instance, in January alone this year, the local government monthly pension gulped N277million paid out to 7,816 retirees while the state government paid N439million to about 8,840, so the government has about 17,000 retirees on its pay roll every month.
As at December 31, 2019, this administration committed well over N21.4billion on monthly pension in the last four years. So if you calculate the three segments it will be N34.1billion.
Despite this success story, why are there complaints here and there from retirees concerning payment of their entitlements?
Honestly without bias, we must acknowledge that the state government has done very well in terms of payment of pensions and gratuity. I am saying this because when you look at what is coming in as resources to the government, you will appreciate what I am talking about. The complaints you are talking about is lack of patience on the part of the retirees to go through due process, and allow the government to pay them their due. I can tell you that there is no month that we don’t pay them, especially those that are due. It is a first line charge for this administration to pay pensioners. Sometimes they receive their money even before the civil servants.
So those retirees who are still hanging out there waiting for their pension and gratuity, how does the government intend to handle their payments?
The intention has always been to pay them their entitlements but like I said, initially we were looking at 3,000 local government retirees and 5,000 state retirees, but now the number has increased because of the explanation I gave earlier. Now, funding to meet up with the increasing number has become a challenge but it is our prayer that we will get the resources to pay everybody 100 percent in all the variables that I have explained.